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House of Assembly - Fifty-Fourth Parliament, First Session (54-1)
2018-10-16 Daily Xml
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Temporary Generators

The Hon. D.C. VAN HOLST PELLEKAAN (Stuart—Minister for Energy and Mining) (14:18): I seek leave to make a ministerial statement.

Leave granted.

The Hon. D.C. VAN HOLST PELLEKAAN: The South Australian government has undertaken a thorough and methodical process to determine the best future for the generators purchased by the previous Labor government. The South Australian government will today provide a market notice that it will undertake an open lease by tender process to operate the generators for a 25-year period subject to strict controls to ensure that they operate—

The Hon. J.W. Weatherill: Privatisation—you're addicted.

The SPEAKER: No, member for Cheltenham, I am not addicted to privatisation and you are called to order.

Mr Picton: They are.

The SPEAKER: The minister has the call.

The Hon. D.C. VAN HOLST PELLEKAAN: The South Australian government will today—

Members interjecting:

The SPEAKER: Order! The minister has the call. He has leave.

The Hon. S.K. Knoll: Unreconstructed leftie in the back row.

The SPEAKER: The Minister for Infrastructure, please!

The Hon. D.C. VAN HOLST PELLEKAAN: The South Australian government will today provide a market notice that will undertake an open lease by tender process to operate the generators for a 25-year period, subject to strict controls to ensure that they—

Members interjecting:

The SPEAKER: Order!

The Hon. D.C. VAN HOLST PELLEKAAN: —operate to help deliver more affordable and reliable power in South Australia.

Mr Malinauskas interjecting:

The SPEAKER: Leader!

The Hon. D.C. VAN HOLST PELLEKAAN: The government will soon take ownership of the nine GE TM2500 generation 8 aeroderivative units and associated equipment. We need to clean up this costly and unnecessary mess left by Labor. The Marshall Liberal government has previously committed to retaining the temporary emergency generators—

Members interjecting:

The SPEAKER: Minister, please be seated. It is going to be a real shame if members depart before question time today. The minister does have leave, and he is entitled to be heard in silence.

Members interjecting:

The SPEAKER: And his colleagues should also allow him to be heard in silence.

The Hon. D.C. VAN HOLST PELLEKAAN: Thank you. The Marshall Liberal government has previously committed to retaining the temporary emergency generators in their current locations until autumn 2019. The government has further determined that some of the capacity may be required for providing emergency generation in the SA market until autumn 2020. Lessees will be responsible for their commercial operation in South Australia and the diligent maintenance of the equipment so that they are running at times of need in the peaks, with the SA government retaining ownership of the units.

Tenders sought for lease of the generators for 25 years will be evaluated on the basis of maximising value to South Australian energy consumers. The tender process is expected to commence in early November to enable completion of negotiations with successful parties by April 2019. The government will continue to monitor market conditions before making its final decision. Therefore, the government has not taken up the options canvassed by Mr Livesey QC of selling the generators or entering into direct negotiations with APR Energy.

It is clear from the Livesey report that the decision to procure the generators was undertaken seemingly without expert advice as to the long-term need and offered no advantage to South Australia at enormous and unnecessary expense to taxpayers.

Members interjecting:

The SPEAKER: Order!

The Hon. D.C. VAN HOLST PELLEKAAN: It was no more than an expensive election stunt by a government that had failed to provide reliable power at an affordable price. The most recent forecasts by the Australian Energy Market Operator in its recent Electricity Statement of Opportunities confirms that there is a declining need for the temporary generators over the coming summers.

There are also important reforms underway, which will mean that, across the whole national energy market, sufficient reserves are procured, if needed, in a more cost-effective way through the development of a strategic reserve by AEMO. With the likelihood that they will not be needed into the future, leasing the generators for 25 years can help with delivering more affordable and reliable power.

We are moving forward positively with our energy solution based upon the world's largest rollout of home battery storage, an expansion in grid-scale storage and accelerating the interconnector with New South Wales. Some of our older generators will be retiring from the market over coming years. These older and less flexible generators are struggling in a market dominated by renewable energy. This course of action is appropriate in that context. By retaining strict controls, whilst allowing the units to enter the market instead of lying idle for decades at enormous expense, these generators can help deliver what all South Australians are seeking: more affordable and reliable power.

The SPEAKER: The member for Kaurna is also called to order.

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