South Australia will take advantage of a meeting of energy ministers next week to win funding for a multimillion-dollar plan linking the South Australian power market to the national grid that could stop a repeat of wind power price spikes in the state last month as reported by AFR.
But energy experts are calling for other more affordable options to be considered first and the move could be opposed by fossil-fuel generators which profit from higher prices when renewable power falls short. South Australian Energy Minister Tom Koutsantonis has stated at an urgent meeting of the Council of Australian Government energy ministers that he would push for a true national electricity market with a greater interconnection that would allow renewable and clean energy to meet the national renewable targets.
One of the primary causes of South Australian power spikes was wind generators that supply half of the state’s power were becalmed at a time when an existing cable connecting South Australia with abundant power in Victoria was out of action for an incremental $65 million upgrade. According to Mr Koutsantonis, Victoria interconnects with 3 states: Tasmania, New South Wales and South Australia, that’s why they have the cheapest average prices. They can access cheap hydroelectricity from Tasmania and New South Wales and cheap wind power from South Australia. Queensland, South Australia and Tasmania on the other hand, only interconnect with one other state each. This limits the markets and the generation these states can tap into.
Transmission from Transgrid recently announced plans to build a $500 million interconnection cable from New South Wales to South Australia but any proposal would require the Australian Energy Regulator to certify that it represents an efficient way of solving the problem. Base-load fossil-fuel generators that benefit from local power shortages opposed the recent interconnector upgrade but the AER approved it anyway.
Mr Koutsantonis also linked South Australia’s problem to a tight domestic gas market and said he would push Victoria and New South Wales to end effective moratoriums on coal seam gas development.