South Australia’s renewable energy future hanging by a thread

Source: AAP

It’s an election that is impossible to call. And too important to ignore.

Just two days out from the South Australia state poll, the result is in the balance, and so too is the fate of South Australia’s status as a world leader in renewable energy. It’s an outcome that could have a huge bearing on the pace of the energy transition for the whole of the country.

It was supposed to be a three-horse race between Labor – facing the monumental task of trying to secure a fifth consecutive term after 16 years in power – the SA Liberals, and Nick Xenophon’s newly formed SA Best.

Xenophon – hugely popular three months ago – has slipped back in the polls, but his party could still be kingmaker early next week, choosing to support a minority government of either Labor or the Liberals, based on the number of seats, votes, or some other criteria.

For what it’s worth, SportsBet is favouring a Labor victory, saying the odds have come in at $1.78  from $2.30), compared to the Liberals ($2.10, out from $1.57) and SA Best ($16, out from $6.50). The best odds are for a hung parliament ($1.33, in from $1.45).

More relevant, perhaps, is the assessment of ABC election analyst Anthony Green, who says that due to a redistribution of seats since the 2014 poll, the Liberals are already sitting on a notional majority of 24 seats.

That means Labor would need a 3 per cent swing in its favour, not counting the influence of SA Best, to displace them. On local radio on Thursday morning, the local pundits weren’t seeing it – putting Labor at 18-19 seats, well short of the 24 they will need to govern in their own account.

This is a troubling prospect for the clean energy industry, and for those who want to see South Australia continue its world-leading transition to a renewables-based economy, and to set an example for the rest of the country.

If renewables were to be the deciding factor in this election, then Labor would be a shoe-in.

Renewables – despite the repeated attempts to demonise wind and solar – remain hugely popular, even among Liberal voters. But Labor is the only party to fully articulate how it sees the state’s energy future unfolding, and how it will manage it.

Premier Jay Weatherill has outlined a 75 per cent renewable energy target for 2025, along with a 25 per cent “renewable storage” target, and has made it clear that he will not be cowed by the right-wing bully boys in Canberra, or the coal lobby. He has set the state’s own agenda and is sticking to it.

His policy is to focus on embracing this energy transition with world-leading and world-biggest initiatives such as the Tesla big battery, the world’s biggest solar tower at Port Augusta, the world’s biggest “virtual power plant”, and the biggest wind and solar-powered hydrogen electrolyser, among a host of other projects.

An artist’s impression of the Aurora plant to be built by SolarReserve in South Australia.

Crucially, this renewables vision is backed up by the actions of business people like Sanjeev Gupta, who says the future of manufacturing and other energy intensive industries depend on cheap green energy, and Germany’s sonnen, which intends to build a battery storage manufacturing plant in Australia.

The Liberals, on the other hand, are all over the shop. Their campaign – much of it based around the sort of conservative myths we outline here – has already been censured by the SA electoral commission, which accuses them of being “inaccurate and misleading.”

The Liberals issued a fleeting and begrudging apology over its claim of huge bill reductions. (Most of the reductions will be delivered by Labor’s in-place policies). But if the Liberals win, the energy industry is not sure what to expect, apart from more myth making.

The Liberals policy document constantly refers to out-dated solutions such as “baseload”, without ever explaining what that might be: in South Australia, that cannot mean coal, nor should it mean expensive gas.

They vow to scrap the state-based target, and they declare support for the federal Coalition’s National Energy Guarantee, despite fears it would worsen South Australia’s principal problem – the lack of competition and the resultant high prices.

The inconsistency of the Liberals position is perhaps best summed up by the blogger Ronald Brakels, who noted in this piece on SolarQuotes:

• They (the Liberals) blame Labor for not having enough back up power but are against the state-owned power plant that provides back up power.
• They say they support free market policies but blame Labor for not interfering in the market to prevent a private company from closing a coal power station.
• The (Liberal policy) document claims the SA grid is unreliable but also says the state-owned power plant is a waste of money because the grid is so reliable it will only get used an average of once every 10 years.
• They have nothing good to say about Labor, but many policies they say they will follow are similar to what Labor is doing.

It is this last point that is most salient to the industry.

The state – with the projects under construction – is already committed to well in excess of 50 per cent renewables. It is the lack of vision, and the sort of mindless opposition to new technologies that pervades their federal counterparts, that scares participants the most.

The Liberals don’t support a state-based target, but Marshall himself has admitted that reaching 75 per cent by 2025 is certainly achievable.

In fact, apart from deliberately blocking the likes of Gupta from building huge solar plants to protect the future of industries like the Whyalla steel works, it’s hard to see how South Australia could fail to meet that target.

The Australian Energy Market Operator, for instance, says that S.A. could reach 73 per cent renewables by 2020/21, and doesn’t seem concerned about being able to manage this, talking enthusiastically of the new technologies like the Tesla big battery.

But stopping people from reaching targets is what the Coalition has proved adept at doing.

The national RET effectively came to a halt for three years – a major cause for the recent price spikes on the wholesale market – as the Coalition looked to trash the scheme altogether. And the NEG appears to be designed with the intent to stifle wind and solar projects over the next decade.

Ominously, the SA Liberals talk of requiring solar and wind developers to provide “market impact” studies for renewable projects.

The Liberals openly agree with Labor only on their support for the proposed solar tower and molten salt storage project in South Australia (it’s in the electorate of the Liberals energy spokesman, Dan van Holst Pellekaan), and on delivering battery storage for households.

The Liberals target 40,000 households in a means-tested grant program offering $2,500 for each installation, while Labor targets 60,000 households in two different schemes targeting low-income households with zero upfront payments.

Liberals wants an interconnector to NSW to be built soon, Labor is happy to wait. The Liberals don’t seem to have a plan of what to do with excess wind and solar capacity.

Labor is looking at battery storage and pumped hydro, and its Renewable Technology Fund has probably already locked in about 400MW of storage capacity. It is also looking to see if hydrogen can deliver the promise of green energy exports.

As for the others, Xenophon’s SA Best remains vague on its details, and how to manage this energy transition, but it accepts that it is inevitable, and that 90 per cent renewables by 2030 is possible, although not a target.

The Greens want to go the whole hog, to 100 per cent by 2025, but do not appear to have much traction in this poll. Cory Bernardi’s Conservatives propose the usual right-wing nonsense – wanting to build a 1GW coal plant and create a nuclear waste dump.

So, what does the renewable and storage industry want? Without doubt, another Weatherill government.

Liberals leader Steve Marshall and energy spokesman Pellekaan, a former BP executive, have railed long and hard against wind. Pellekaan himself blamed it for power surges that caused outages, and has echoed federal resource minister Matt Canavan’s call for the Northern coal generator to be re-opened.

Labor has mis-stepped – its energy security target was misguided, but it had the sense to dump it; it probably didn’t need to buy the emergency back-up diesel generators when a lease might have been better value; and its pro-gas drilling agenda is troubling for many.

But Weatherill’s vision is clear.

“People are proud of our leadership on renewable energy,” he noted in the recent interview in the popular Energy Insiders podcast. Even people who are not completely convinced about climate change believe that renewables are the technologies of the future.”

But he’s not getting much support in the mainstream media. The Murdoch press, dominant in South Australia, firmly supports the Liberals. Even the Guardian, in its main electoral wrap – slugged “It’s time for change” when first published – ignored the energy issue.

But Weatherill’s fear is that if Labor loses, it will be termed as a defeat for renewables, and an excuse to wind back policies.

“What will happen, should we not be successful, the opponents of renewable energy will say South Australia’s leadership in renewable energy was the cause of their demise. That will be used against any other government that wants to push deeply into renewable energy.”

And that’s a prospect that makes you feel ill.