Australian news, and some related international items

Not renewable energy, but problematic gas market, causing South Australia’s electricity troubles

Energy executives say gas market – not windfarms – to blame for South Australia’s woes
Main problem afflicting country’s grid is the lack of clear policy direction from Canberra, witnesses tell Senate inquiry, Guardian, Katherine Murphy, 7 Mar 17
Senior executives from AGL Energy have given evidence that the main issue causing problems with reliable energy supply in South Australia is “dysfunction” in the gas market – not too many windfarms making the grid unreliable.Executives from AGL told a Senate inquiry in Melbourne on Tuesday they would like to build a new gas-fired power station in South Australia to increase base load capacity in the state, but gas supply was chronically unreliable in the eastern states.

Richard Wrightson, AGL’s general manager of wholesale markets, told Tuesday’s hearing the problem was so dire the company was contemplating building its own LNG hub in Queensland to help secure reliable supply downstream.

“Dysfunction in the gas market is causing most of the systemic problems we are seeing in South Australia,” Wrightson told the Senate select committee into resilience of electricity infrastructure in a warming world.

“We would love to be able to contract more in that marketplace but the main restriction on being able to do that is access to flexible gas contracts that we are able to trade in an out of.”

The Turnbull government has argued that ambitious state-based renewable energy targets are driving too large a share of low-emissions technologies, such as wind power, into the grid, and that is a significant factor behind the unreliable conditions in South Australia.

 But a number of witnesses appearing before the Senate committee on Tuesday said the main problem afflicting Australia’s energy grid was not proliferating renewables, but a lack of a clear policy direction from Canberra. The policy vacuum had created a damaging investment strike in new assets at a time when old coal-fired power generators had reached their natural age of retirement.

Ross Garnaut, the economics professor who led the climate change policy review for the Rudd government and was the independent expert adviser to the multi-party climate change committee that developed the carbon pricing scheme subsequently repealed by Tony Abbott, said the political debate about climate and energy policy in Australia was “incoherent”……

The chief scientist, Alan Finkel – the official leading the energy review – has already provided implicit support for an emissions intensity scheme in his preliminary report to the government, saying it would integrate best “with the electricity market’s pricing and risk management framework” and “had the lowest economic costs and the lowest impact on electricity prices”.

But the energy and environment minister, Josh Frydenberg, has already ruled outconverting the government’s existing Direct Action scheme to a form of carbon trading after a brief internal revolt in the Coalition party room.


March 8, 2017 - Posted by | energy, South Australia

1 Comment »

  1. The Editor
    The Advertiser

    Dire warnings from the Australian Energy Market Operator (AEMO) that gas shortages mean electricity shortages (The Advertiser, 9/3/17) are a little late. Shortages of affordable gas have already had serious consequences for electricity generation in SA.

    These shortages are the result of market forces. Because the demand for a limited supply of gas has risen then so has its price. These market forces apply to all non-renewable fuels but not to solar and wind energy. Because sunlight and wind can’t be exported then they are not subject to market forces.

    SA has been a trend-setter in the generation of electricity from renewable energy, but it still needs to implement energy storage. Many storage technologies exist but may seem expensive. This situation may soon be irrelevant in that as non-renewable fuel costs go up, energy storage costs come down as their use increases.

    SA has the opportunity to become a leader in energy storage, let’s not waste this unique opportunity.

    Dennis Matthews

    Comment by Dennis Matthews | March 9, 2017 | Reply

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