SA Government to purchase 75 per cent of electricity needs

SA has the highest electricity  power prices in the country.

The South Australian Government says it will launch a tender to buy 75 per cent of its long-term electricity needs in an effort to increase competition.
SA has been hit hard by spiralling electricity costs over recent years and the Government wants to introduce a new competitor to the market.

Premier Jay Weatherill said current rules allowed private electricity companies to drive “prices higher by withholding supply”.
“A small number of energy suppliers in South Australia have too much power,” he said.
“If we increase competition, we will put the power back into the hands of consumers.”

South Australia’s electricity provider, the Electricity Trust of South Australia, was privatised in 1999.

It changed its name to SA Power Networks in 2012.

Mr Weatherill said the tender was a “medium-term” response to the need to drive down prices.
In addition to the tender process, the Government will commit $24 million toward a program incentivising local gas producers to extract more gas and supply it to the local market.
The Australian Energy Market Operator reported last month that price volatility in July was caused by a record cold, high gas prices resulting from constrained supply from the east coast, and a planned upgrade of the interconnector to Victoria.

“We need stronger physical links into the rest of the National Energy Market so South Australia can continue to increase its supply of wind and solar power and sell it into the national grid,” Mr Weatherill said.

Carbon emissions scheme on the cards

The SA Government also wants to “explore” an Emissions Intensity Scheme (EIS) that would trade credits between energy companies at a national level.

Independent senator for SA Nick Xenophon said an EIS was a “breakthrough” that would increase power reliability, reduce costs and bring about good environmental outcomes.
He said that under an EIS, “dirty generators” that emit above a baseline emission rate would have to pay for the pollution while those below it would be credited.
Senator Xenophon said he proposed it at a federal level with the then opposition leader Malcolm Turnbull in 2009.
“It seems that after seven long years of skyrocketing power prices that the ‘mongrel scheme’ that I proposed with Malcolm Turnbull has now become the ‘top dog’,” he said.
Yesterday, Port Augusta residents lobbied Mr Weatherill to commit to purchase the power from a proposed solar thermal project in the state’s north.
Mr Weatherill said the tender would not specify which power plant technology should be used.
The Government last year embarked on an expressions of interest process aimed at sourcing 100 per cent of its power needs entirely from renewable sources.
But in July, it launched a formal tender process for dispatchable renewable power to provide just 25 per cent of the Government’s needs, acknowledging a 100 per cent commitment would be too expensive.

One Comment Add yours

  1. Raymond says:

    State governments have for some years been divesting their / our utilities off to foreign companies. I wonder if the States would be in such a financially stuffed situation had the utilities i.e., Gas Water Electricity some parts of the Public transport systems remained in government control. Sell offs are a quick fix in the short term but have disastrous long term problems.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s