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Kangaroo Is. challenges network ruling that could choke renewables

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kangaroo islandKangaroo Island, the iconic tourist location south of Adelaide, has lodged an unprecedented challenge to the state’s main network operator over its decision to effectively close an opportunity for the island to become a major exporter of renewable energy.

The island’s administrator and council have become the first to use new rules that allow network spending decisions to be challenged by local communities. They say the decision lacks transparency and they want a review – and they are questioning the whole process.

Some of the island’s residents had hoped to convince the network operator to junk plans to replace the ageing cable that links the island to the main grid, and instead support a home-grown renewable energy plan to enable the island to use renewables – wind, solar and biomass – to meet its own electricity needs.

It was a project, its proponents said, that could pioneer a new age of renewable energy, on what was the country’s first free-settled colony.

That plan, however, came undone after South Australia Power Networks revealed that the cost of replacing the cable would only come to around half of its previous estimates ($25.6 million versus $45.6 million). That undercut the 100% renewable energy plan.

But SAPN earned the islanders’ wrath when it decided on a new 33kv cable to the island, rather than a 66kv cable that could carry more capacity.

The Kangaroo Island community wants a 66kv cable installed, noting it would cost just $1.9 million more, would ensure that all future needs are met, and offer an opportunity to export power back to the mainland.

As a result, the Commissioner for Kangaroo Island and the Kangaroo Island Council have lodged a formal “dispute notice” to the Australian Energy Regulator, the first time a Regulatory Investment Test has been disputed.

kangaroo solar

“This piece of crucial infrastructure must be able to provide for growth in demand for electricity on Kangaroo Island and for the island’s potential to harness its natural resources and export energy back to the rest of South Australia,” mayor Peter Clements says.

The islanders want to keep their options open – they have vast swathes of eucalyptus plantings that could generate biomass power, not to mention excellent wind resources – and also question if SAPN has taken into account nearly $200 million of new developments.

Wendy Campana, the island’s commissioner, says the community is questioning the whole process, and why SAPN originally described the best option as a 66kV cable that would cost around $45 million, when they ended up settling on a cable with half the capacity and half the price.

According to advice it has received, the commission suspects that the network owner will get a “bonus” of around $10 million for having found a “cheaper option”.

“We are actually questioning why it can go to submissions, and say 66kV and $45 million, (then say) we only need 33kV and $25 million. They get to keep the difference.”

Campana says that if it was clear that the cable would cost around $25 million, then proponents of competing options, including those of high renewables, might have been able to better tailor other options.

As it is, one of the proponents of the 100 per cent renewable energy plan, the Sydney-based Institute for Sustainable Futures, is regretting the decision, saying that there was an opportunity for a mix of wind, solar, storage and biomass that could have looked after the island’s needs.

However, ISF’s Chris Dunstan says it was a difficult plan to pursue without the enthusiastic support of a majority of the island community. “It seems like a lost opportunity,” he says.  

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  • solarguy

    So the FF plot thickens. SAPN clearly don’t want for anyone to see that RE can do the job, same for their LNP cohorts. Questions I’d like to see answered are below:-

    What exactly is wrong with current cable and how much life is still in it?

    Will or can SAPN force this 33kv cable on to the residents and make them pay for it. Do they have the choice tell SAPN, no thanks we will sort ourselves out?

    Going forward here a bit, if they have the right to say to SAPN no new cable thanks, we will supply our own power by RE and storage, I’m reasonably confident some RE company could make a proposal to build a 100% RE system, consisting of wind and solar plus storage and run it at a cheaper cost. Tender by reverse auction perhaps.

    This would become a showcase to the world. No reason that it couldn’t be done, if they can dodge the political control freaks.

    • Chris Drongers

      Take the smaller cable but require the $10M be put into a renewable power and battery

  • Kevan Daly

    I reckon SAPN should be glad to be rid of the liability of supplying Kangaroo Island. This is the second time while I’ve been a SKI (SAPN’s 49% owner) shareholder that the cable has needed upgrading. I can’t understand what’s going on here.

  • Goldie444

    The SA govt has said they plan major changes to how the energy market is to work in SA. I hope this includes how the South Australia Power Networks (SAPN) works as well.
    While I would think that 100 RE would be best, not to lay a 66kv cable would be just stupid.