July 25, 2016
Australia

Call to end wind farms until power solution found

Meredith Booth, Reporter | David Uren, Economics Editor | The Australian | www.theaustralian.com.au

South Australia’s power crisis was a “wake-up call” for other states on the impact on consumers of subsidised renewable energy, particularly wind power, a Liberal senator has warned.

Chris Back called for a moratorium on new wind farms, and no more subsidies for wind energy generators until the Productivity Commission conducted a cost-benefit analysis of the effect the industry was having on the National Electricity Market and retail electricity costs.

“There should be no further subsidies paid for an intermittent and unreliable power source that can be seen as a proven failure. There are solutions to our climate challenges but wind power is not one of them,” Senator Back said.

Wholesale electricity prices in South Australian have now “normalised” to double the rate of other states.

The state government applied pressure to accelerate upgrade works on the state’s Heywood Interconnector with Victoria to bring it back online two days earlier than forecast.

The connector, operated by private company ElectraNet, was offline when wholesale electricity prices spiked from an average of $100 per megawatt hour to almost $14,000/MWh on July 7, and triggered major businesses to threaten shutdowns.

It was brought back into operation on Saturday night, lifting its former capacity from 460MW to 500MW between the states.

The sapping of power by wind turbines during calm weather on July 7 at the height of the crisis was also blamed for the price surge in the state, which is 40 per cent reliant on wind and solar power generation since the closure of Alinta’s coal-fired power station in May.

The upgraded interconnector would increase its capacity to 650MW in both directions over the next few months, but leaves South Australian consumers reliant on wind and solar for 40 per cent of the energy mix, paying double the wholesale electricity price paid in eastern states.

State Treasurer and Energy Minister Tom Koutsantonis said yesterday his government had applied pressure to accelerate the interconnector’s upgrade and prices had now normalised.

Consumers could “take advantage of renewable resources and export them to the rest of the country” now that the upgrade has been completed.

The upgrade came as Australian Energy Market Operator chairman Tony Marxsen announced the sudden death on Saturday of founding chief executive Matt Zema.

Mr Zema, 56, was a 30-year electricity industry veteran who had been the “heart and soul” of AEMO for eight years.

Data from the operator yesterday showed South Australia’s average spot wholesale price had dropped to $75.37/MWh on Saturday, from $200/MWh on Friday.

But prices were still well above those paid in NSW, Victoria and Queensland at between $33 and $57/MWh on Saturday.