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House of Assembly - Fifty-Third Parliament, Second Session (53-2)
2016-02-10 Daily Xml
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Electricity Prices

Mr MARSHALL (Dunstan—Leader of the Opposition) (15:22): My question is to the Treasurer. Has the minister read the Australian Energy Regulator analysis of future base electricity prices, published on Monday this week?

The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy) (15:22): I have had a look at it. It does make predictions, and they are just that—they are predictions. Those predictions can hopefully be borne out to be inaccurate, and we are working to do that.

An honourable member: It's a government run on hope.

The Hon. A. KOUTSANTONIS: No, we're not the ones—

Members interjecting:

The Hon. A. KOUTSANTONIS: Mr Speaker, it's a bit rich for the party that imposed this on the state to be now complaining about it. I say again to members: compare the two utilities in the state. One is government owned: price decreases; one—

Mr Marshall: It's renewables.

The Hon. A. KOUTSANTONIS: Ah, here's the point; that's what it really is about. We finally get to the truth of the matter. The Leader of the Opposition interjects that it's renewable energy causing this. Ah, that's right. Finally, the truth comes out of the party that doesn't believe in climate change.

An honourable member: Rubbish!

The Hon. A. KOUTSANTONIS: But your leader just said renewable energy is increasing prices. Which one is it?

Members interjecting:

The Hon. A. KOUTSANTONIS: Oh, it is. The cause of it is. It would interest members to know that, at some stages in South Australia in the wholesale energy market, there were bids of minus $1,000 because of renewable energy.

Mr Marshall: Why?

The Hon. A. KOUTSANTONIS: I will tell you why: because of interconnections. The way these assets were privatised has left a legacy in the state. Every South Australian knows.

Members interjecting:

The Hon. A. KOUTSANTONIS: Mr Speaker, the constant interjections.

Members interjecting:

The SPEAKER: I'm taking the Treasurer's advice to me, continually in the three years I've been Speaker, to let the game flow.

The Hon. A. KOUTSANTONIS: I'm glad today you've decided to wear the fluorescent vest, sir; it is very impressive. Given your new liberal attitude towards this, I will say to the most unpopular Liberal in the country that he and his party are the ones that have caused this mess and we are attempting to fix it. The Australian Energy Market Operator—

The SPEAKER: My recollection, Treasurer, is that you were asked whether you had read the report, and I understand you have.

The Hon. A. KOUTSANTONIS: The Australian Energy Market Operator recently advised that the Heywood interconnector project—

An honourable member interjecting:

The Hon. A. KOUTSANTONIS: The pressure is rising. If I had his Newspoll results I would be upset too. The Australian Energy Market Operator has recently advised that the Heywood interconnector upgrade project is on track for completion in mid-2016, as I told the house. The government is also in the process of pursuing changes to the Energy Regulation Framework to ensure an efficient wholesale energy market.

We submitted a rule change to the Australian Energy Market Commission after becoming concerned that the bidding in good faith rules no longer achieve their purpose, which may mean that generators can operate in a manner that gives rise to inefficiencies leading to higher prices or, in some instances, negative prices in the National Electricity Market. The rule change seeks to strengthen the rules to ensure that future generator bidding practices are consistent with an efficient, competitive and reliable market, because we have the peakiest markets in the market.

South Australia's National Electricity Market is very peaky. We get very extreme lows and very extreme highs. So what that means is that our manufacturers are buying power at times that are opportunistic for them and operating at those times, like Kimberly-Clark in the South-East, which does a very good job on the spot market. Brighton Cement are also doing the same sort of work. We are encouraging a lot more small to medium-sized enterprises to use that type of technology to do the same thing. What we need to do is flatten out the peaks and troughs—

Mr Marshall: So what are you doing about that?

The Hon. A. KOUTSANTONIS: This rule change that I have just been telling you about, Mr Speaker, that the Leader of the Opposition probably has absolutely no idea about, because he is so focused on keeping his job, is about making sure—

The SPEAKER: Alas, the minister's time has expired.

Mr MARSHALL: Supplementary, sir.

The SPEAKER: Supplementary.

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