South Australia's Electricity Price Woes and NSW's Advanced Energy Policy

August 15, 2016



Electricity prices and supply risks have been highlighted by recent massive price spikes in South Australia reflecting supply shortages. In a report released this month, the market operator, Australian Energy Market Operator, warned of possible disruptions to the electricity supply if a further 1,360 megawatts of coal-fired electricity were removed from the National Electricity Market. This is approximately equivalent to removing just one coal-fired generator from the national grid. Impacts could include blackouts over the next decade in Victoria and South Australia, as well as in NSW.
 
The situation in South Australia was the focus of discussion at the recent CoAG Energy Council meeting in Canberra. Energy Ministers have agreed to look at ways to increase onshore gas supplies and examine the possibility of an interconnector from SA to NSW.

NSW has been well-served for decades by our relatively cheap and very reliable coal-fired power generators. On any given day, coal-fired power supplies up to 90% of our state’s electricity. And while our power plants are ageing, new technology can deliver the same cheap and reliable baseload electricity from coal, with lower emissions.
 
Here in NSW the Minister for Resources and Energy has announced the development of an Advanced Energy Policy. The plan, to be developed with the assistance of energy experts, has a 20- year outlook and aims to lay out the pathway for transitioning to a lower emissions electricity grid.
 
The NSWMC has been speaking regularly to the Minister and his staff about the Advanced Energy Policy and will be continuing to advocate for a sensible plan that works, not one that is based on what is popular at the time. NSW needs electricity that is reliable and affordable as well as less carbon intensive. Achieving this requires the full range of technology and options to be considered, regardless of their perceived popularity.
 
A range of power generation sources are needed to meet our future energy needs. However, sacrificing affordability and stability of supply to every home, in every suburb and every town across the State for what is ‘popular’ at the time could have disastrous long-term consequences for NSW.

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