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The SA Deal Is A Missed Opportunity For Cheaper, Cleaner And More Reliable Energy

Subsidising gas extraction in the age of climate change is reckless and will do nothing to drive down power prices.

14/03/2017 4:42 PM AEDT | Updated 14/03/2017 4:42 PM AEDT
Shutterstock / majeczka
"The public knows renewable energy with storage is cheaper, more reliable, and good for the planet."

The South Australian Government has made an ambitious energy announcement today, though it is by no means bold. It weds South Australians to struggling through huge electricity bills that won't come down with an over-reliance on gas-fired generation ruled by the world market.

This announcement is a missed opportunity. The gas industry has received a huge payday today and it comes as no surprise that the mining lobby are singing its praises. Subsidising gas extraction in the age of climate change is reckless and will do nothing to drive down power prices.

That's because if we want cheaper, more reliable power, we have to stop the big power companies gaming the current electricity system, monopolising the market and locking cheaper forms of power out.

The State Government's new gas-fired power plant won't save SA from blackouts next summer when it doesn't even have a home yet.

But really, it comes as no surprise. When you've got the Federal Energy Minister and the self-proclaimed 'Innovation Prime Minister' sitting on their hands and playing the blame game for South Australia's energy woes and discrediting renewable energy where possible, gas is an easy sell for this State Government.

Unfortunately, the rules that set the electricity market are out of date, and despite the growth in consumer demands, they work against cheaper forms of power like wind, solar and battery storage.

The system, built back in the day for the old, fossil-fuel power generators, allows the big power companies to game it. By withholding supply when it suits them, waiting for when demand is high --like on those scorching hot days when everyone's air conditioners and fridges are working overtime -- and then pushing up prices, they're simply maximising profit.

That's the market working, right?

Well, no. It's not working for the consumer, or new cleaner energy supplies, and it's not forcing the cost of power bills down. It beggars belief how any of this will change under Jay Weatherill's plan.

This plan ignores the wind farms, solar thermal plants, large-scale battery farms and pumped hydro waiting in the wings for the green light to get started. They need a State Government that will work with them, not continue to prop up the price-gauging competition.

The public knows renewable energy with storage is cheaper, more reliable, and good for the planet.

Elon Musk, in throwing down the gauntlet to build a battery storage farm in 100 days or its free, set the stage for Jay Weatherill to make a bold announcement with baseload Solar Thermal and battery storage at its centre. Instead, we have a State Government that wants a bob each way. But by getting into bed with the big gas companies, the signal to renewables is drowned out.

Renewables and large-scale battery storage don't need special favours or subsidies to compete (unlike unpopular and un-financeable 'clean coal') they just need the market rules to be fair and not rigged against them.

Fixing the rules means ensuring that batteries and storage have a market value for the services they offer (peak capacity, grid stabilisation and instantaneous power). Similarly, grid-scale battery owners should be able to buy power from people who have solar on their roofs at the same price as the big retailers can.

The old power companies love high prices, and they're threatened by the prospect of new rules boosting competition that generates better service for customers and cheaper prices.

The opportunity for cheaper, cleaner and more reliable energy was missed today. The State Government's new gas-fired power plant won't save SA from blackouts next summer when it doesn't even have a home yet. The public knows renewable energy with storage is cheaper, more reliable, and good for the planet.


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