SA Plan Tackles The Symptoms, Not The Cause

The South Australian Government’s radical intervention to try to ameliorate the critical state of local electricity supply only highlights the urgent need for an effective national energy strategy, the energy industry said today.

The Australian Energy Council’s Chief Executive, Matthew Warren, said while the industry welcomed the clear focus on increasing the supply of firm generation in South Australia, "the plan is still treating the symptoms of no national energy strategy.  The South Australian Government can’t solve the root cause on its own".

“We welcome the clear focus on increasing firm generation in SA and measures to increase gas supply.  There are many businesses on the ground in South Australia right now trying to find ways of getting new generation and storage into the market.

“South Australia’s electricity market problems have resulted from poorly designed government intervention and subsidies in the national electricity market, not the design of the market itself.  We would prefer the solutions outlined by the SA Government be delivered by competitive business investment rather than more taxpayer funded subsidies.

“Parts of the plan raise further questions. It is unclear how having the state government occasionally take over the operation of the SA electricity market would work in practice.  It would be much more preferable if we could agree on revised operating rules for the existing market operator.

“While we recognise the importance of more firm generation, a state energy security target could increase costs by constraining retailers to source higher cost local generation.  Again a national policy solution would be preferable.

“The South Australian Government’s frustration is clear in today’s announcement. Many features of its energy plan would be made redundant by effective national energy policy reform.  This would be a win for all consumers and remains the fastest and cheapest way of fixing Australia’s energy crisis.”

About the Australian Energy Council

The Council represents 21 major electricity and downstream natural gas businesses operating in competitive wholesale and retail energy markets. These businesses collectively generate the overwhelming majority of electricity in Australia and sell gas and electricity to over 10 million homes and businesses.

Media contact             Carl Kitchen                0401 691 342