South Australia locks in federal funds to become first grid in world to reach 100 per cent net wind and solar

South Australia has locked in federal funding to ensure that it becomes the first non-hydro grid in the world to reach 100 per cent net renewables.

The funding deal – through what’s known as a Renewable Energy Transformation Agreement – means that the federal government will underwrite a minimum one gigawatt of new wind and solar generation capacity and another 400 MW (1,600 MWh) of storage – to ensure it meets its target of 100 per cent net renewables by 2027.

South Australia already leads Australia – and the world – with a wind and solar share of around 70 per cent over the last 12 months. The addition of the new capacity, along with the new Project Energy Connect transmission link from NSW, will enable it to become the first in the world to reach 1`00 per cent net renewables based around wind and solar.

That does not mean it will be powered at all times by wind and solar. But the amount of wind and solar generated and stored each year will be equivalent to what it consume each year. The state will export power at times and import at other times, and can fall pack on existing peaking gas plants to fill in the gaps.

Reaching that milestone will be a landmark for the state, and for advocates of the renewable energy transition, particularly as conservative and legacy fossil fuel interests continue to push back on the idea that a modern economy can be powered by renewables and storage.

The irony about South Australia is that the target of 100 per cent net renewables was originally committed by the state Liberal government. The state Labor government merely accelerated it from 2030 to 2027.

And to underline the difference in federal politics, the announcement was made at Port Augusta, the site of a former coal fired power station that the federal Coalition wants to turn nuclear, but which has already become a hub for green energy and green industry.

“South Australia has been a renewable energy pioneer – so much so that we recently brought forward our renewable energy target by three years, committing to ensure electricity generation can be sourced from net 100 per cent renewables by 2027,” state energy minister Tom Koutsantonis said in a statement.

“So we warmly welcome this agreement to accelerate the roll out of renewables while ensuring the reliability of the energy system.

“Our government is committed to working with the Commonwealth to establish a secured grid, supporting the power needs of South Australian households and businesses.”

South Australia has not added a new wind or solar project to the grid for around two years, although the biggest wind project in the state – the 412 MW Goyder South wind farm – is about to connect and send its first power to the grid.

Several new battery projects are also under construction – at Blyth, Hallett, Clements Gap and Templers and another, Tailem Bend, still waiting to be commissioned.

These projects will help propel the state towards 80 per cent renewables over the coming year, while the additional capacity of 1,000 MW of wind and solar, 400 MW of battery capacity (plus the minimum 200 MW included in the current CIS auction) will take it towards 100 per cent net renewables by 2027.

South Australia is also building the world’s first green hydrogen power plant at Whyalla, which will be accompanied by a 250 MW green hydrogen electrolyser and storage facilities, which will also be the world’s biggest when complete.

The state is also fielding huge number of inquiries from industry keen to source zero emissions and low cost green energy – with the local transmission company ElectraNet reporting that more than 2 gigawatts of load inquiries have been made.

Federal energy and climate minister Chris Bowen says the signing of the Renewable Energy Transformation Agreement means that South Australia is the first state to lock in the funding required to meet its targets under the federal government’s Capacity Investment Scheme.

The CIS aims to contract an additional 32GW of renewable generation and storage across the country to help it deliver most of the capacity needed to meet its 82 per cent renewable energy target by 2030.

The first tender of 6 gigawatts of new wind and solar capacity has been flooded with interest, with more than 40 GW of projects showing interest, while the first storage tender – for 600 MW, 2,400 MWh in Victoria and South Australia – was also heavily oversubscribed with some 19 GW of proposals.

Bowen says the bilateral agreements have been designed specifically to address the barriers developers, communities, and governments face in delivering renewable projects, and to replace ageing infrastructure that was built half a century ago.

“The Albanese Government is delivering the certainty and confidence the market spent a decade asking for,” Bowen said in a statement.

“The more renewable energy we have in our grid, the more downward pressure it puts on energy bills because it is the cheapest form of energy to power households and industry.

“Giving the market the confidence to build new projects is good; signing an agreement to collaborate with South Australia on practical steps to get the best out of this energy transformation for South Australian workers, communities and industry, is great.

“The Albanese Government’s Reliable Renewables Plan is the only plan supported by experts to deliver the clean, cheap, reliable and resilient energy system that Australians deserve. This is in sharp contrast to Peter Dutton’s anti-renewables nuclear plan – which remains uncosted and unexplained.”

As part of the deal, South Australia, will establish its own specific grid reliability mechanism and benchmark to be used in place of the national framework, and to be responsible for identifying and delivering new projects and technologies that will maintain reliability to that standard.

Renew Economy is seeking more information to understand what that means in practice.