South Australia’s impressive renewable energy transition

Jul 12, 2021

South Australia underwent a significant renewables transition under successive ALP governments from 2002 until 2018. In 2002 SA generated its electricity locally from brown coal and gas and imported around 30% of its annual needs from Victoria where brown coal production dominated. There was no production from renewables. Jump to 2018, when the ALP lost office after 16 years, and the state was generating 52% of its electricity from renewables with the remainder from natural gas, with 3% of net annual production being exported east.

Leading up to the 2018 election, which they went on to win, the Liberal opposition in concert with their Federal colleagues attacked SAs renewables transition claiming it was responsible for the state’s comparatively high electricity prices and blackouts that hit the state in 2016 and 2017. One of which induced Scott Morrison to infamously brandish a lump of coal in parliament and pun that South Australia under the ALP’s renewables policies had entered the ‘dark’ ages.

The state was hit by blackouts including one that affected the entire Adelaide metropolitan area. Thus, in the lead up to the 2018 election, the ALP had a policy to increase its independence from the National Energy Market and grid, which it argued had caused one blackout. Its policy of self-reliance entailed a renewable energy target of 75% by 2025, increased battery and pumped hydro storage, and new instantaneous gas-fired generation as a backup. It also supported via an advanced purchasing agreement, a private solar thermal plant at Port Augusta able to store energy as molten salt.

In comparison, during the run-up to the election, the Liberals emphasized the need for lower costs and increased reliability. Their policy commitments included improved management of existing and future renewables, and grant subsidies for households to adopt battery storage. However, the major policy difference between the parties was a push by the Liberals for greater integration into the national system by fostering the construction of a new interconnector into NSW, with the rationale of gaining access to its cheaper coal-generated power.

The Liberal government was confronted with a well-established renewable energy transition with dozens of proposals for new renewable generation and storage on the horizon. A transition so entrenched it would have required legislation to halt it. Faced with this reality the new government gradually became champions of the renewables transition themselves.

Fortune also shone upon the new government, wholesale prices for electricity fell and became the lowest nationally in 2020, even as the proportion of electricity generated from renewables continued to rise and reach 60% that year. This price drop was a result of household solar forcing down daytime prices and lower gas prices, not better management or policy changes.

In line with the new attitude, the yet to be constructed but promised interconnector metamorphized into an opportunity for the state to export excess renewables east and help build renewable capacity in the state. Although difficult to substantiate, the longtime government proposal to construct the interconnector potentially affected the long-term viability of proposed hydro storage and the solar thermal plant, leading to their shelving. This action has likely delayed SA reaching 100% renewables and therefore using the national and global kudos from this for economic advantage.

The Liberal government also adopted a target to increase electricity production to 100% by 2030 with a notional aspiration to increase it to 500% by 2050. Excess capacity is to be used for transitions in the transport, manufacturing, and agriculture sectors, to attract new sustainable industries, and for export via interconnectors interstate or internationally as green hydrogen.

On the other hand, while the Labor Party opposition is very quiet about the planned interconnector, it too has a 100% target for renewables by 2030. As a point of differentiation from the Liberals, the ALP is also proposing a government-owned 250 MWe green hydrogen production facility to attract green manufacturing, provide peak electricity generation, and facilitate hydrogen exports.

The South Australian story provides hope in a country where climate denialism is still rampant among the Federal Liberal-National Coalition government. The transition can happen and does not result in the “dark ages” forecast by Prime Minister Morrison but rather reduces costs and contributes to Australia achieving zero-net emission by 2050. The transition also sends a global message that there are actors in Australia who will be able to hold their heads up high during the UN Climate Change Conference (COP 26) in Glasgow, and demonstrate that we don’t all have our heads in a coal mine!

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