South Australia renewables frame-up covers for fossil fuels electricity prices heist

Waterloo wind farm near Mintaro in South Australia.
July 28, 2016

Hysterical anti-renewable headlines aren't necessarily a surprise from the Australian and other News Ltd publications. But the cynicism of the attack on South Australia's renewable energy industry in their pages is still astonishing.

On July 25, the Australian published Matthew Warren of the Australian Energy Council — a peak body for “major electricity and downstream natural gas businesses” — blaming renewables for “higher costs and increased risks around reliability” in South Australia.

An article in the same edition of the Australian quotes Liberal Senator Chris Back calling for a halt to “subsidies” for renewable energy — does he mean the sale of Renewable Energy Certificates? — while an inquiry is held into their costs. This is just before the article mentions that the interconnector that can supply a quarter or more of South Australia's electricity was offline for an upgrade when electricity wholesale prices spiked to their allowed maximum, $14,000 per megawatt-hour, on July 7.

Renewable energy in SA mainly comes from wind farms, which are typically on fixed-price “power purchase agreements”. The large generators in SA are gas-powered, typically one of the most expensive electricity sources in the market. Renewables actually mean less gas is burned and overall reduce the number of expensive price peaks over the year.

The Australian and Matthew Warren are strangely silent about this, and about the other source of high prices: large electricity generators going offline. Mysteriously, large generators like Pelican Point went offline during recent price spikes, only restarting after an appeal to its owners, Engie, by the state government.

All this has occurred while gas prices are at a high, and companies are looking for gas to pipe to Gladstone to meet LNG export contracts. While Engie and Origin have said their gas power station outages were because it “wasn't economic” to run them, it would be interesting to know what it was specifically that made them “uneconomic”.

Although the Australian Energy Regulator is charged with checking up on these kinds of mysterious outages to try to ensure the market is not being manipulated to artificially raise prices, it may not always be easy to prove and it usually takes a long time to settle, by which time the current political storm may have already reached whatever dismal conclusion the vested fossil interests are gunning for.

Meanwhile, the gas export industry and the vested fossil interests in the big generators get to profit from the crisis, while blaming their renewable competitors. Will they get away with it? Not if the community wise up to the reality behind the confidence trick. The undeniable popularity of renewables and a wider understanding of the truth about the market manipulations might just hasten their demise.

[This article first appeared at yes2renewables.org.]

Like the article? Subscribe to Green Left now! You can also like us on Facebook and follow us on Twitter.

Issue