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House of Assembly - Fifty-Third Parliament, Second Session (53-2)
2017-03-01 Daily Xml
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Electricity Generation

Mr VAN HOLST PELLEKAAN (Stuart) (14:30): My question is for the Minister for Mineral Resources and Energy. Has the minister been advised by Arrium, Nyrstar, BHP or Adelaide Brighton Cement that they intend to purchase on-site electricity generators to protect their operations and employees from further devastating blackouts?

The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy) (14:30): I have met with all those companies. I meet with them regularly and a number of others that are talking about a whole series of measures they want to put in place to lower prices. A lot of them are very concerned about the continuation of supply, which is why the government will be intervening. They all recognise the failure of the national market and they all recognise the failure of the way the market is operating. They all recognise that it's not giving them what they wanted.

This all comes back to the experiment that we're in here, which isn't about renewable energy, but about the privatisation of an essential service that's been a failure. What we need to do is to come up with mechanisms that retake our sovereignty in this issue so we can actually insert ourselves into this market to protect South Australians.

There is a reason that these companies are going to the spot market. There is a reason that these companies are investing in gas exploration to try to get gas out of the ground to try to link that to generation to hedge for higher power prices. When these companies that the opposition asks me questions about read about policies to ban the exploration of gas in certain areas of South Australia, they are horrified. I don't know how anyone opposite can ask me a question about this without cringing, given what they are doing to our energy policy by trying to ban the exploration of gas in gas-rich regions alongside infrastructure like pipelines. I don't know how anyone can have any credibility asking me questions like that.

I don't blame any of these companies for doing that. Tomago in New South Wales, which is in a jurisdiction that is heavily reliant on coal-fired generation, was let down terribly by coal-fired generation last week when they were forced to close some lines, and when they close those lines that costs production. Coal-fired generation wasn't able to meet demand, but of course, in the absence of a national policy, there is no price signal to reinvest in new generation, so coal-fired generation crowds out the market. It doesn't let anyone new come in because there is no price signal, but when demand is really high we just turn industry off. Their coal just sits there. They continue to make their tidy profits, polluting and making donations to the Liberal Party and it's all okay.

The AI Group, an industry group that is no ally of the Labor Party, put out a report on Monday talking about a 47 per cent increase in prices in New South Wales that's overwhelmingly reliant on coal. Nearly 87 per cent of all of their generation comes from coal. If coal is so good and it's so cheap, why are the people of New South Wales getting a 50 per cent increase in their power prices? I will tell you why—because the market is broken. The market doesn't serve the people: it serves the interests of the owners of the generators, the poles and the wires—the people members opposite did a dirty deal with to sell our generators to and that's why we have to unpick it. This addiction to privatisation, this addition to the market—

Mr VAN HOLST PELLEKAAN: Standing order 127: imputing improper motive.

The SPEAKER: Yes, I uphold the point of order.

The Hon. A. KOUTSANTONIS: In the absence of price signals, there are going to be price increases across the NEM, and companies all across the National Electricity Market will be looking at putting in solar panels, batteries and their own generation to try to minimise costs because the real issue here is not availability of supply; it's cost. Cost is what is hurting this nation because coal is failing to give us cheap power.

You have seen the reports, Mr Speaker, that Queensland has had higher price spikes than South Australia since the start of the year—and of course those prices are unacceptable and there needs to be an intervention because the market clearly has failed.

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