The electricity generator being built as part of the Hydrogen Jobs Plan is critical to energy supply in South Australia, a new Australian Energy Market Operator report on energy reliability reveals.
The State Government-owned generator being built in Whyalla must connect to the grid as soon as possible to counterbalance the impacts of early closures of privately operated gas-fired generators and fresh cross-border delays to the interconnector being built between SA and NSW.
Without the Hydrogen Jobs Plan generator, the state would be at risk of failing to meet national reliability standards, according to the report published by AEMO.
The heightened risk highlights the recklessness of the former Marshall Liberal government, which sold off operation of two gas-fired generators which had been purchased by the state to ensure South Australia had a buffer of power kept in reserve for emergency use to avoid blackouts.
It also highlights the complacency of the Marshall administration banking on the Project EnergyConnect transmission line connecting to power supply in NSW.
When that connector was proposed in 2016, a target build date was set at 2021 with costs estimated at $500 million to $1.5 billion.
Costs and schedule grew in stages until the project was approved by the Australian Energy Regulator in May 2021 at a cost of $2.3 billion and a completion date of June 2023.
The South Australian part of the connector from Robertstown to the border was finished late last year but the NSW side has faced ongoing delays, with the latest announced in April.
In today's report, AEMO now expects the full 800-megawatt capacity to only be available by July 2027 because of the NSW delays.
Since AEMO published its annual reliability report – the 2023 Electricity Statement of Opportunities – last August, early closures of privately owned generators have been flagged.
AGL now says one of the four 200MW units at its Torrens Island Power Station will not return to service. The remaining three units are due to close in mid-2026.
Meanwhile in February, ENGIE announced it would mothball its 75MW plant in Port Lincoln and its 63MW Snuggery plant in the South-East from July this year. Full closure of both plants has been brought forward to 2028 instead of 2030.
These changes, and other developments interstate, have led AEMO to publish today's update to its 2023 report.
The update forecasts that in 2026-27, South Australia will be at risk of being 35MW short of the reliability standard which requires at least 99.998 per cent of forecast customer demand to be met.
Under the tighter interim reliability standard – of 99.9994 per cent to meet a one-in-ten-year hot summer – SA would be at risk of being 305MW short.
SA demand usually gets to about 1500MW a day but exceeds 3000MW during summer heatwaves.
AEMO's most pressing concerns are in NSW and Victoria, where shortfalls against the interim reliability standard are expected from this coming summer onwards as coal-fired power stations exit the system. The report states NSW is at risk of being more than 1000MW short as soon as 2025-26.
In SA, however, AEMO has factored the Malinauskas Government's Hydrogen Jobs Plan 200MW generator into its central scenario to be built in 2025-26 and fully commissioned by 2026-27.
The new Hydrogen Jobs Plan turbine will greatly reduce risk, putting SA into safe territory to meet the tight interim reliability standard and keep the lights on once it is fired up.
As put by Tom Koutsantonis
In the privatised electricity market, operators have flirted with the edge of reliability to minimise their capital investment in new generation and maximise their profits.
When Labor was last in Government, we fixed the problem by buying back-up generators – but the Marshall Liberal government sold them off.
Now, new risks have emerged which show that the State Government's investment in the Hydrogen Jobs Plan is absolutely essential.
This is an independent assessment that proves the Hydrogen Jobs Plan is good for jobs, good for the environment and good for all households in this state.
