…you couldn’t dream up a crazier set of events that have driven fears that South Australia is a sign of the threats to come to power supply reliability and price from lots of renewable energy…The Chief Scientist’s report provides a rational discussion about the future energy security of the National Electricity Market but is surrounded by an environment of ridiculous hysteria and fear…Leading the charge in spreading fear has been Adelaide’s one main newspaper, the Adelaide Advertiser.
Wind power was attracted to SA not because of Mike Rann but because of the state’s high underlying wholesale electricity prices. This is due to SA’s historical heavy reliance on costly gas and the concentrated ownership of power generation…SA’s residential electricity prices are inflated again by its unusually peaky air conditioner demand for power that has required paying for lots of network capacity that is only rarely utilised. Plus the state, unlike others, has avoided subsidising residential electricity…This has meant SA’s homeowners have been more enthusiastic adopters of solar systems than other states. You see SA’s high electricity prices were the cause of its high amount of renewable energy, not the other way around. A doubling in gas prices since the establishment of LNG facilities has then made SA’s situation even worse.
Yet as part of a Howard Government initiative, South Australia and other eastern states agreed to hand over their energy regulatory responsibilities to national institutions – the Australian Energy Market Commission (AEMC), Australian Energy Regulator and Australian Energy Market Operator (AEMO)…It is these bodies that hold the responsibility of ensuring the lights stay on and they report, not to SA alone but also the Federal Government, Victoria, NSW, Queensland and Tasmania.