Interim Power Generation to Cost S.A Taxpayers $100m a Year

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A plan by the Weatherill government to ship in a fleet of temporary diesel generators to prevent pre-election blackouts in South Australia will cost taxpayers up to $100 million a year.

The news comes after The Australian revealed that, from tomorrow, South Australian residents pay the highest electricity prices in the world, according­ to calculations by energ­y market consultant Bruce Mountain.

Mr Mountain told The Australian­ on Tuesday that “the represent­ative household” in South Australia would overtake Denmark­ to “unequivocally” have the world’s highest power prices before and after taxes.

The state’s Labor government remains under intense pressure on the cost and relia­bility of power, after its green-energy­ policies led to the closure­ of the state’s last coal-fired power station. The next state poll is due in March.

The government has contracted privately owned South Aust­ralian electricity distribut­ion company SA Power Networks to obtain and install 200 megawatts of back-up generation across the state before summer.

But despite promising a “detailed costing” would be provided in last week’s state budget, Treasurer Tom Koutsantonis did not offer any such details.

The opposition said the budget had allocated $114m for operational costs in 2017-18 from the $550m energy plan, “indicating the diesel generators are going to be very expensive”.

“Eighteen months ago the Tasmanian government spent $64m in leasing, site establishment and operational costs for 220MW of diesel generation for three months when a combination of drought and repairs to the Basslink left it short of electricity,” energy spokes­man Dan van Holst Pellekaan said.

“Rather than spend $8m a year to keep the (coal-fired) Northern Power Station operating, Jay Weatherill has chosen to spend up to $100m a year on diesel generation until the government turns on its promised new gas generator in two years’ time.”

SAPN spokesman Paul Roberts said last month the project was on track, but has referred questions to the government.

Mr Koutsantonis said potential suppliers of the temporary generators had been shortlisted and “evaluation is continuing on their proposals, with the process on track for generation to be operational­ by 1 December”.

SAPN has met with regulatory and other bodies to seek expedition of necessary approvals.

Mr Koutsantonis also denied there was a deadline of this month to announce the successful party of a tender the government launched last year to buy 75 per cent of its long-term electricity needs. However, the government’s tender documents show the successful bidder was to be notified this month, with a contract executed next month.

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