When it comes to wind, Premier Mike Rann can’t stop talking about it.
He is continually extolling the virtues of wind power and how South Australia is leading the nation in getting power from renewable energy resources.
Unfortunately, wind power will only go so far.
It supplies only 16 per cent of the state’s energy needs according to the Australian Energy Management Organisation.
SA relies on gas for around half of its generating capacity with coal supplying about 32 per cent.
The giant headache facing SA is the future generating capacity over the next decade. Wind power will never be a baseload generator – it is too unreliable.
As one generator explained: “You can’t ring up a wind farm during summer peak demands and say turn on the generator.
“If there’s no wind, there’s no power.”
The state is going to need another major baseload generator within 10 years – especially if the Olympic Dam expansion goes ahead because it will need an additional 650MW of power on top of the 125MW it already uses – almost half of South Australia’s daily demand.
Uncertainty over a carbon tax is preventing investment in new baseload plants and is also ensuring that existing generators, such as the Northern Power Station, are weighing up their options.
The Government considers climate change to be one of Australia’s most important challenges and supports a smooth transition to a carbon-constrained future.
It also admits it is not possible at this stage to model the impact of a carbon tax on the Northern station which burns low-grade brown coal from Leigh Creek.
Owners of Northern, Alinta, said this week one option being considered was replacing them with a new gas plant which would cost up to $540 million.
With power generation and transmission in SA and Victoria in private hands, any future investment in electricity generation in this state will have to be undertaken by the private sector.
Industry sources say there is not going to be any major investment in the foreseeable future.
Plenty of companies are interested in building small peaking plants which only come on stream when demand reaches its heights during heatwaves and the like.
None are going to commit to huge investments in baseload power for some years.
This does pose a major dilemma for South Australia, despite the Government’s confidence that gas-fired generation will be a significant part of supplies for the state into the future.
Those gas supplies have to come from the Cooper Basin or from Victoria. They are not infinite and we could end up having to also draw on further gas supplies from Queensland.
Even building a new interconnector from Victoria or NSW to augment current supplies will not be cheap – estimated at up to $3.7 billion.
Fossil fuel power stations will remain this state’s main power generators for decades to come.
It now has to ensure that there are plentiful gas supplies to keep those generators working because coal-fired generators are becoming “dinosaurs”.
The only other option is nuclear – and that is highly unlikely to be taken up.
Mr Rann has already made it clear that while he likes digging up the uranium we have, he wants it shipped out of South Australia and never used here as a future power source.
It is also doubtful the Liberals, who believe they have a very strong chance of winning, would harm their chances by going to the 2014 election espousing nuclear power as a way ahead.
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