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House of Assembly - Fifty-Third Parliament, Second Session (53-2)
2017-03-29 Daily Xml
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Alinta Energy

Mr MARSHALL (Dunstan—Leader of the Opposition) (14:30): Supplementary, sir: is the Premier telling the people of South Australia that this government did no due diligence whatsoever on the Alinta proposal?

The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy) (14:30): The Treasury, the Department of State Development at the time and our energy markets office were all very cautious about the idea of subsidising one generator in the National Electricity Market. Why? It amounts to a capacity payment.

Mr Gardner interjecting:

The Hon. A. KOUTSANTONIS: Capacity payments are very dangerous for the economy—

Mr Knoll interjecting:

The Hon. A. KOUTSANTONIS: —and I will tell you why capacity payments are very dangerous to an electricity market.

Mr Knoll interjecting:

The Hon. A. KOUTSANTONIS: I enjoy the interjections from members who have no policy on energy. Perhaps rather than interjecting, they could release a policy we can debate. In the absence of a policy, the government will move ahead with its proposal. We were very concerned about the idea of paying a capacity payment to one generator. Why? Because that capacity payment they were seeking first of all would have given us no guarantee that they wouldn't have pulled out anyway.

Mr MARSHALL: Point of order, sir: I ask that you bring the minister back to the substance of the question, which was whether any due diligence was done on the Alinta offer.

The Hon. A. Koutsantonis: That's exactly what I was talking about.

The SPEAKER: I just think that is a point of order without merit. Treasurer.

The Hon. A. KOUTSANTONIS: What the Treasury and State Development and energy markets were all considering was: if we made this payment to a generator in Port Augusta that was offering 250 megawatts into the National Electricity Market, what would be the next phone call we would receive from generators that were older and in need of urgent upgrades? We have already seen the threats from AGL and Torrens Island already bringing out their A units.

I know that facts get in the way of the slogan-speaking and the shouting, but the facts are these. Torrens Island is at risk of being of course decommissioned. We want new investment. We want AGL to reinvest in Torrens Island. If we were paying a capacity payment to one generator, it goes without saying that every other generator that has a larger footprint in the NEM and has a much larger impact on prices would turn around the very next day and say to the South Australian taxpayer, 'If you're prepared to pay this for 250 megawatts, what will you pay for 1,200 megawatts?'

Ms Sanderson interjecting:

The SPEAKER: The member for Adelaide is warned for the second and final time.

The Hon. A. KOUTSANTONIS: Then Osborne with its Origin contract, which has tolled through, would say exactly the same thing. Then, when we are reaching peak demand in summer, those gas-fired generators would be exercising not only monopoly rent, not only market power, but they would have market power over the taxpayers' purse and that would be unacceptable. The biggest threat to the economy is subsidising the private sector.

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