The government says the $550 million plan will increase security, boost competition and put downward pressure on prices.
The plan involves:
- Building a government-owned 250 MW gas-fired power plant to provide emergency backup and system stability services, and procuring temporary backup generation if necessary.
- Incentivising increased gas production to ensure more of the state’s gas is sourced and used in SA.
- Building Australia’s largest battery to store energy from the wind and sun.
- Introducing new Ministerial powers to direct the market to operate in the interests of South Australians.
- Introducing an Energy Security Target to ensure the power system uses more clean, secure energy sourced in SA.
- Using the Government’s purchasing power through its own electricity contract to attract a new power generator.
The new gas-fired power plant is budgeted to cost $360 million, $150 million will be committed to the SA Renewable Technology Fund and new PACE grants are worth $24 million.
The plan is expected to create at least 630 new jobs.
The oil and gas industry has welcomed the South Australian Government’s recognition of the key role natural gas has in meeting the state’s ongoing energy needs.
Australian Petroleum Production and Exploration Association (APPEA) SA Director Matthew Doman said the Government’s new energy plan unveiled today highlighted the importance of natural gas in smoothing Australia’s move to a low-emissions energy future.
“The State Government has taken decisive action to ensure natural gas is once again playing a major role in meeting the energy needs of South Australia,” said Mr Doman.
“Today’s announcement to develop more gas-fired generation and encourage more local gas production will help secure reliable, affordable energy for South Australian homes, businesses and industry.
“APPEA urges the government to continue to work cooperatively through the COAG system, and encourages other states to consider the measures SA has embraced to secure reliable, affordable and cleaner energy from natural gas.”
Across the border
Meanwhile, the Victorian Government will invest an additional $20 million to support large-scale energy storage initiatives across the state.
This new funding will support energy storage companies that specialise in technologies including batteries, pumped hydro or solar thermal, partner with network businesses to boost energy storage capacity in Victoria up to 100MW by the end of 2018.