The State Government has announced measures to increase energy market competition, drive down costs for businesses and consumers and reduce carbon emissions.
The Government will launch a tender to procure 75 per cent of its long term electricity needs, aimed at introducing a new competitor into the energy market, increasing competition.
The Government will also commit $24million towards a program to incentivise companies to extract more gas and supply it to the local market.
This will increase the supply of gas into the energy market, with South Australian energy generators, industry and households having first offering.
An Emissions Intensity Scheme which trades credits between energy companies will be explored at a national level, with further modelling to be undertaken over the coming months.
Today’s measures to increase competition provide a medium term response to the need to drive down energy prices.
The Government has already announced measures to drive down spot prices in the short term, through restarting the Pelican Point power station, and in the long term through pursuing better interconnection as well as changes to the National Energy Market rules.
Last month, the Australian Energy Market Operator reported that South Australian spot market volatility in July was the result of a confluence of events – a record cold snap, high gas prices
resulting from constrained supply on the east coast, and a planned upgrade of the interconnector to Victoria.
In July, the State Government announced it would source 25 per cent of its electricity from dispatchable renewable energy providers.
At last month’s COAG Energy Council meeting, it was agreed that proposed changes to the regulatory test for a new interconnector between South Australia and New South Wales be
The 2016 State Budget included $500,000 towards a study into a new interconnector between South Australia and New South Wales.
At the most recent COAG Energy Council officials were tasked with developing advice on integrating energy policy and green markets. The State Government has commissioned Danny Price from Frontier Economics to model a national Emissions Intensity Scheme.
Quotes attributable to Premier Jay Weatherill
The small number of energy suppliers in South Australia have too much power – if we increase competition, we will put the power back into the hands of consumers.
Increasing competition in the energy market is the best way to drive down power prices for South Australian households and businesses.
The current rules also let the big private electricity companies drive prices higher by withholding supply – these measures address this inadequacy.
The measures we are announcing today alongside steps we have already taken can ease prices in the short and medium term. To deliver long term reform, the national electricity rules
have to change.
We need stronger physical links into the rest of the National Energy Markey so South Australia can continue to increase its supply of wind and solar power and sell it into the national grid.
Quotes attributable to Mineral Resources and Energy Minister Tom Koutsantonis
South Australians are at the mercy of a small group of electricity generators because the previous Liberal Government sold the State’s electricity assets to monopolies.
They also scrapped plans for an interconnector to New South Wales in order to inflate the sale price of ETSA, making us vulnerable to spot market price spikes when the interconnector to
Victoria is being upgraded – which is exactly what happened in South Australia in July.
Today, we are taking steps to increase competition in this State.
There is a lack of available gas in the national market, a situation made worse by the decision in Victoria to ban onshore conventional and unconventional gas exploration and development.
Gas is an important transitional form of energy generation that works in tandem with renewables, providing base-load power to stabilise the system as more renewables come online.