MPI Energy Three Minute Statement
Posted on Wednesday, 15 February, 2017
Mr RAMSEY (Grey—Government Whip) (15:46): It gives me no pleasure at all to stand here today and proclaim myself as a modern-day Cassandra, but I can say, 'I told you so.' I have been saying for quite some time—in fact, for over four years; I have checked my records—what would happen to the South Australian electricity grid if we ignored the signals that were clearly on show for us.
I began meeting with Alinta right back in 2012, and they told me that their power station was beginning to lose money. It was not because the price of energy in South Australia was being driven down by cheap energy coming from the wind farms; it was because it was being driven down by oversupply. Basically, we were building new power stations, new wind farms, in South Australia that were oversupplying the market. Of course, at the times of high wind, the Alinta operation became worse than non-profitable. In fact, they were paying very high fees to unload electricity, which they could not stop generating.
The South Australian government has made an art form out of attracting wind energy into South Australia. The figures are worth visiting. More than 50 per cent of Australia's capacity in wind farms is situated in South Australia. Around 60 per cent of that generation capacity is situated in my electorate of Grey. The national target that both sides of politics agreed to sign off on—actually, that is probably not quite true. Anyway, the national target, which we set only 12 months ago in this place, is 23 per cent. South Australia is already at 41 per cent—way in front of the recognised limit. It is worth noting that Denmark are held up as a great paragon of this transformation of electricity, and they have set their wind limit at 23 per cent. In South Australia, we have gone to 41 per cent.
In the three years to 2015, I met with Alinta repeatedly. They said that, if we kept building more wind capacity in South Australia, they would withdraw from the market. They were meeting, of course, with the South Australian government at the same time. This was a clearly telegraphed message coming from Alinta. They did not give a date; they had hoped to stay there longer. They bought an asset that they believed would survive longer.
What I call on the South Australian government to do, and what I have been calling on them to do for some time, is to approve no more renewable energy in South Australia, no more new projects, unless they include storage. This is a very important message. There is nothing wrong with renewable energy at all, and, in fact, I am a great supporter of it. I have been trying very hard to get two projects attracted into Port Augusta—both with solar thermal storage. But, at this stage, the South Australian government continues to sign off on new wind farms without storage, which will further disrupt the market. It is as if they are the three wise monkeys: they are sitting there and they do not want to hear any evil, they do not want to see any evil and they are not going to speak any evil. 'We'll just keep approving the wind farms; it'll be all right.' It will not be all right.
South Australian industries are being severely damaged. Some of the major employers in my electorate have been mentioned in this debate. BHP at Roxby Downs is estimated to have lost somewhere near $100 million in the power outage in September, and Arrium, severely damaged, had around $10 million worth of damage. Nyrstar, which is investing close to $500 million in Port Pirie, is absolutely horrified by what has happened to the electricity market. Reliability is one thing—and it is very important—but the price of electricity in South Australia is crucifying their industries. I had an abalone farm in Port Lincoln which was intending to invest in a major expansion, but its electricity bill has gone from $700,000 to $1.33 million in 12 months. That is a 90 per cent increase. I was talking to some McDonald's franchisees—three separate outlets, employing 290 people between them. Their electricity bills have risen by close to 100 per cent across the board in the last 12 months. These are the people who are employing our kids. There are 290 employees in these three McDonald's franchises, and they are facing electricity rises of 90 per cent. (Time expired)
The DEPUTY SPEAKER ( Mr Coulton ): Could I ask the ministers and shadow ministers at the table to be a little quieter. It is interfering with the other speeches.