Weatherill: Why state election will be a referendum on renewables

Feb 23, 2018

South Australia Premier Jay Weatherill might not be able to see much daylight between his Labor Party and the rival Liberals and SA Best, but he’s certainly making sure there is a big difference between his energy policy and those of the Opposition and the upstart party of Nick Xenophon.

Over the past few weeks, before and since the start of the official election campaign, Weatherill has been trotting out almost daily announcements about significant new investments and new targets for renewable energy and energy storage in the state.

It was capped this week with his world-leading 75 per cent renewables target by 2025, the Australia-first “renewable storage” target of 750MW, Australia’s first battery manufacturing plant, to be built by Germany’s sonnen, and any number of individual renewable and storage projects.

There is good reason for this. Renewable energy, according to the polls, is a lot more popular than the Labor government, struggling under the burden of 16 years in power and about an even bet with the Liberals, with Xenophon the wild-card.

Weatherill may well have thought, when interviewed by RenewEconomy at the Paris climate talks in late 2015, that his government’s push into renewable energy was something of an “experiment” – a comment that has been used against him after the controversial power outages of 2016 and 2017 – but now he wants his government to be seen as synonymous with the technology.

“What will happen, should we not be successful (at the March 17 poll), the opponents of renewable energy will say South Australia’s leadership in renewable energy was the cause of their demise,” Weatherill says in an interview on RenewEconomy’s popular Energy Insiders podcast.

“That will be used against any other government that wants to push deeply into renewable energy.

“We have been facing a massive campaign of misinformation waged by the coal lobby against the South Australia government.

“We know that they are fully cashed up and have very effective message mechanisms …. anything that  goes wrong in the South Australia market is blamed on renewable energy, and anything that goes wrong in coal-rich NSW or Victoria gets another explanation.”

Weatherill insists the pursuit of renewable energy has been a success.  The Australian Energy Market Operator, having “dropped the ball” is now managing the system properly (new CEO Audrey Zibelman has been a “breath of fresh air”, he says), and renewables have not been the cause of any outages.

“What we have demonstrated is that despite having 48.9 per cent renewable energy, we haven’t had any reliability issues that caused outages because of the size of our renewable energy,” Weatherill says

The blackouts in September 2016, and in February last year, were caused by major weather events and failures in the National Energy Market, the latter when “perfectly good supply” (a major unit at the Pelican Point gas generator) was not  switched on because of “the way the market works.”

That prompted the SA government to intervene, building its own emergency back-up, and launching a series of initiatives that has seen the world’s biggest lithium-ion battery built by Tesla, and the world’s biggest solar tower with molten salt storage due in 2020.

This has been accompanied by a series of investments and studies in battery storage, pumped hydro and hydrogen energy projects, along with virtual power plants and micro-grids.

And the Tesla big battery, next to the Hornsdale wind farm, is already having an impact, particularly in markets that provide network services known as FCAS (Frequency Control and Ancillary Services).

“The Tesla big battery is already smashing the FCAS market, and we will get fantastic benefits from not being ripped of by the existing generators for those FCAS services,” Weatherill says.

It is because of the need to increase competition in the local market and bring the influence of the Tesla battery and other dispatchable renewable technologies on to local prices, that Weatherill opposes building a new interconnector in the short term.

“In the short term, (a new interconnector) would basically prevent another competitor coming in on our side of the market – we think interconnectors are a good medium term option, although expensive, o export renewable energy to other states.

“Our problem at the moment is market power on our side of the border – what we need is more generation capacity. That where we are putting our focus.”

South Australia has been at loggerheads with the federal Coalition government and the state Liberals since those blackouts – both over the course of national policy (SA Labor opposes the national Energy Guarantee), and the Coalition’s criticism of the big battery.

The baiting between Adelaide and Canberra erupted after the state-wide blackout, and intensified after Weatherill gave federal energy minister Josh Frydenberg a tongue lashing last year.

Labor’s 75 per cent renewable energy target compares to the Liberals pledge to can any state-based initiative, even though both have programs to encourage battery storage in households.

Xenophon’s SA Best is only now starting to roll out its policy proposals, which include creating a new “not-for-profit” retailer, and a tender for 150MW of “dispatchable” renewables.

Weatherill is hopeful Labor can continue without having to strike a deal with Xenophon’s SA Best, but says he is confident, if he must, in being able to convince Xenophon to come on board with Labor’s energy policy, notwithstanding Xenophon’s support of anti-wind campaigns in the past.

“I think I can persuade Nick that this is an appropriate future for South Australia,” he says. “I hope to get there on my lonesome without a coalition. If we do (need to strike a deal), I won’t be compromised on this, because it is critical for the future of the state.”

Weatherill admits that the involvement of Tesla’s Elon Musk with the big battery, Sanjeev Gupta with his plans for a green energy-led revival of the Whyalla steelworks, and sonnen’s proposed manufacturing plant validate his government position.

“People are proud of our leadership on renewable energy. Even people who are not completely convinced about climate change believe that renewables are the technologies of the future. No one is going to build a new coal plant,” he said.

“It is not just South Australia dreaming this up. There are big advantages in being first mover, in circumstance where you anticipate the future clearly, you assertively pursue it and you get the benefits of that.”

South Australia has not had to resort to any state-based mechanism to attract investment – it has silly been better at doing that than other states. And it expects to continue.

“If you have e got a hostile investment climate, you won’t get investment in renewable energy,” Weatherill says. “It comes down to planning, the regulatory environment, using state govt procurement, using funding mechanisms like loans and grants.

“If we are not in government, we will have a Liberal party that is determined to abolish state based renewable targets, giving comfort by a federal coalition that is dominated by coal interests and that will do everything to scuttle renewable targets.”

And he pointed to two new investments that highlight that transition – the SolarReserve solar tower to be built in Port Augusta, helping replace the closed coal-fired generator, and the new solar-plus-battery microgrid to be built at the old Holden plant by Carnegie Clean Energy.

“That is another fantastic message of renewables and hope for the northern suburbs staring at the loss of the car industry,” he says.

This article first appeared in RenewEconomy on 22 February 2018


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