ourenergyplan

OUR PLAN

Battery storage and
renewable technology fund

Goal: Provide South Australia with large-scale storage for renewable energy so power is available when it is needed, beginning the transformation to next-generation renewable technology.

The State Government will establish a $150 million fund to support projects that make renewable energy available 24 hours a day, seven days a week, to power the state when it is needed.

The first project to be funded will be a grid-connected battery – the largest in Australia – to provide the state with 100 megawatts of storage. The battery will modernise South Australia’s energy grid and begin the transformation to the next generation of renewable-energy storage technologies.

The Renewable Technology Fund will provide $75 million in grants and $75 million in loans, to eligible projects, to support private innovative companies and entrepreneurs.

There are a number of large-scale projects under consideration in South Australia, including solar thermal, biomass, hydrogen energy and pumped hydro.

New gas power plant

Goal: Provide South Australia with a government-owned source of emergency electricity generation.

The State Government will build its own gas-fired electricity generator.

Due to the lack of clear national policy settings, investment in new thermal generation has stalled.

The generator will provide up to 250 megawatts of generation, which can be switched on in times of emergency.

At all times, the generator will make South Australia’s electricity supplies more secure by offering the inertia that is needed to stabilise local supplies.

This generator is a strategic future asset to unlock economic growth once the appropriate national energy policy settings are implemented.

The government will go to tender shortly to have the generator in place as soon as possible.

Temporary energy security measure

In the intervening period, the State Government will work with South Australia’s transmission and distribution companies to provide up to 200 megawatts of temporary generation.

This will provide generation for use over short periods in emergency situations where extreme peaks in demand create a shortfall that cannot be met in other ways.

Local powers over
national market

Goal: Give South Australia greater local powers over national market operators and privately owned generators.

The State Government will legislate to ensure that South Australian energy users are not held hostage to unwarranted market behaviour.

The Minister for Energy will be given strong new powers to direct the national market in the case of an electricity supply shortfall.

Ministerial direction includes the ability to direct generators to operate and direct the Australian Energy Market Operator to control flow on
the interconnector.

This will ensure every available option is activated to maintain the state’s electricity supply in an emergency situation or when market forces fail.

Drafting of new legislation will begin immediately. The Minister’s power will be used as a last-resort measure if the national market does not act in South Australia’s best interests.

Local assessment of generation applications

South Australia will require applicants for new electricity-generation projects to demonstrate how they add to local energy-system security.

The State Government will give powers to the Office of the Technical Regulator to assess applications for all generators above 5 megawatts.

The goal is to add stability to local power supplies by requiring developers to include power system security services as part of their projects in South Australia.

This move is part of the state’s development of the next generation of renewable energy.

This will complement the Essential Services Commission of South Australia’s decision to strengthen licence conditions for all new generators.

New generation for
more competition

Goal: Create more electricity generation to increase competition and put downward pressure on prices.

Every year, the State Government pays millions of dollars to power hospitals, schools and government services.

The government is using its buying power to make the local energy market more competitive and stimulate investment in the right types of generation.

New generation

New electricity generators will enter the South Australian market as a result of the State Government tendering 75 per cent of its electricity needs over the next 10 years.

It is anticipated this procurement will result in construction of a new privately owned generator in South Australia.

Increasing competition in the energy market is the best way to drive down power prices for South Australian households and businesses.

More dispatchable renewable energy

Energy that can be dispatched as it is needed helps to provide energy security. Large-scale storage transforms renewable energy into dispatchable energy.

As part of South Australia’s renewable energy transformation, the government is tendering the remaining 25 per cent of its electricity load to support dispatchable renewable energy initiatives.

The new contracts will commence on 1 January 2018.

South Australian
gas incentives

Goal: South Australia to source and use more South Australian gas to generate its own electricity, increasing the state’s self-reliance.

A range of measures is being introduced to incentivise exploration for gas.

Sourcing more local gas

To meet the increasing level of gas-fired generation, the State Government is investing to unlock more of South Australia’s abundant gas resources.

South Australia has vast untapped gas resources. It is estimated the Cooper Basin alone could potentially supply Australia’s energy needs for more than 200 years.

The Plan for Accelerating Exploration (PACE) grant-supported projects are estimated to generate $198 million in prospective expenditure.

The State Government will immediately provide an extra $24 million for a second round of funding to incentivise companies to extract even more gas and create more jobs. This new round will open immediately.

This will increase the supply of South Australian gas into the local energy market. South Australian energy generators, industry and households will have first offering.

Royalties for landowners

A new PACE Royalties Return Scheme will provide 10 per cent of royalties to landowners whose property overlies a petroleum field which is brought into production, opening up new exploration across South Australia.

Energy security target

Goal: Create new investment in cleaner energy to increase competition, put downward pressure on prices and provide more energy system stability.

A new target will require energy retailers to get more electricity from cleaner generators that produce their electricity using South Australia’s abundant natural resources.

In a move to increase South Australia’s energy self-sufficiency, retailers will be compelled to source a percentage of energy from local generators rather than from Victorian coal through the interconnector.

The energy security target is modelled by Frontier Economics. Similar schemes have worked around the country to lower energy prices and stimulate exploration investment.

South Australia is rich in energy producing resources, including gas, solar, wind, biomass and graphite, which is used for batteries.

Analysis by Frontier Economics shows that new investment generated by the energy security target will create more competition and put downward pressure on prices.

South Australia has advocated for a national Emissions Intensity Scheme (EIS) to incentivise investment in cleaner generation. This scheme is not supported by the Federal Government, despite widespread industry and scientific support.

South Australia’s energy security target will transition to an EIS or Lower Emissions Target (LET) if or when national policy changes in the future.