The State Government has welcomed a determination by the national Australian Energy Market Commission that will allow mothballed South Australian generators to be fired up if required to provide temporary backup supply in the event of a future gas shortage.
The AEMC yesterday confirmed its draft decision of earlier this month, after the State Government last year sought a rule change that would allow generators mothballed by operator Engie to be fired up if required to provide additional capacity between now and the completion of the long-awaited interconnector to New South Wales, which the former Marshall Liberal government vainly hoped was the answer to all the state's energy security questions.
Engie last year mothballed the Snuggery (63-megawatt) and Port Lincoln (75MW) peaking generators ahead of their permanent closure in 2028.
But last August, the Australian Energy Market Operator released its 2024 Electricity Statement of Opportunities, which identified potential reliability gaps in several jurisdictions in the coming years, including in South Australia.
The State Government has moved decisively, seeking a national rule change that will allow AEMO to contract Engie to return that additional capacity to the system if required in the event of a load shedding scenario prompted by a shortage of available backup gas.
Both Snuggery and Port Lincoln were previously available and able to be dispatched into the market before the decision to mothball them was made last year – which meant under the existing rules that AEMO would have been unable to contract for their services to reduce any future reliability gap.
That could have created a scenario in which load-shedding was ordered, and the state had additional capacity sitting idle, unable to be
switched on.
This additional capacity would not have been necessary had the former Marshall Liberal government not sold off Government-owned backup generation during its era of error, which left a legacy of energy insecurity for South Australia far beyond its four-year tenure.
The Government has asked Engie to investigate whether they could utilise synthetic fuels or 'green diesel' in the event this direction is implemented, which the company is currently investigating as a possibility.
As put by Energy Minister Tom Koutsantonis
The State Government makes absolutely no apology whatsoever for moving forthrightly to secure appropriate backup generation that ensures there is consistency of supply in the event of a gas shortage.
I am glad the AEMC has agreed to our request to grant the South Australian Government authority to direct Engie to utilise two currently mothballed power stations at Snuggery and Port Lincoln if required between now and when the long-delayed interconnector to New South Wales comes online.
This step, while welcome, would not have been necessary if the former Marshall Liberal government had not sold off our backup gas-fired generators when they were elected in 2018.
Between that disastrous penny-pinching move, which compromised South Australia's energy security to marginally bolster their budget bottom line, and their ill-fated decision to put all their eggs in one basket with Project Energy Connect – which has seen multiple delays and blowouts on the NSW side of the border – the Liberals have left our state more vulnerable to future blackouts in the event of a gas shortage.
Our system relies on gas as a backup to cheaper renewables.
In any system, it makes sense to back up thermal generation – and the backup for thermal generation is diesel.
This is not remarkable – almost every jurisdiction in the country has diesel capacity.
The strong intent is that this safety-net need never be used – but it is simply commonsense to ensure we have every available lever to pull in the event of a gas shortage.
I am not and have never been ideological when it comes to safeguarding energy supply.
The last thing we want is a future scenario where the market operator institutes load shedding and we have additional capacity sitting idle, unable to be switched on.
It is incumbent on a responsible Government to plan for the worst whilst demanding reliability. As far as I'm concerned, every state should have sufficient capacity to look after itself first and not rely on other jurisdictions. While it's unlikely to be used, that's why we sought the ability to bring in this additional generation if it is ever necessary.
