Insanity is a term that doesn’t even come close to capturing the mania that has gripped South Australia in the last few months. Its hapless Labor government refused to cut a deal to keep Alinta’s Port Augusta power plants up and running and, since their closure in May this year, South Australia has suffered rocketing power prices, routine load shedding and several statewide blackouts (the last on the first day of summer).
In a State with the worst unemployment in the Nation by a whopping margin, its long-suffering citizens are being led into a social and economic disaster unparalleled in Australian history. Some call SA the “canary in the coal mine”, while others talk about the “South Australian wind power experiment”, as if the place was in the outer reaches of the cosmos.
Meanwhile, back on terra firma, business leaders are fed up, frustrated and utterly furious at the manner in which a band of morally bankrupt idiots have destroyed South Australia’s once reliable and affordable power supply. Here’s a couple from The Australian.
Jobs at risk: blackouts spook big companies
Michael Owen & Greg Brown
3 December 2016
BHP yesterday stepped up its campaign over crippling energy policies it warned were putting jobs and investment at risk.
Some of the biggest employers and most intensive energy users in the country are so concerned about unreliable power supply in the southern states they are reconsidering investment, in a move that would have a devastating impact on tens of thousands of jobs.
The warning comes as the Alcoa aluminium plant in Portland faces increased risk of closure after a major power outage in South Australia and Victoria on Thursday slashed the manufacturing capacity of the plant at the same time it is being crippled with increased energy costs.
Federal Energy Minister Josh Frydenberg told The Weekend Australian that, in the wake of the latest major blackout, state governments must urgently address the “disaster” by recognising the importance of getting stable baseload generation to businesses. “Big employers are legitimately wary and concerned about the implications of their investment,” he said. “These are some of the most energy-intensive users in the country.”
The latest energy crisis, at the start of summer, sets up a stoush between Malcolm Turnbull and Labor premiers at next Friday’s Council of Australian Governments meeting in Canberra.
The Prime Minister yesterday slammed “Left ideology that says somehow or other we can pursue these enormous renewable targets”. Mr Turnbull took particular aim at South Australia, saying it was the Weatherill government’s responsibility to “keep the lights on” and warned a “lack of reliability” was a problem in seeking to attract industry.
Jay Weatherill hit back late yesterday, accusing Mr Turnbull of being dishonest and promising a showdown at COAG. “The Prime Minister must stand up to the right wing of his party and reject its pro-coal agenda,” he said.
Federal Industry Minister Greg Hunt yesterday blamed the Victorian Labor government for abandoning energy security with a strong push to renewables, putting industry in that state also at risk.
The Australian Workers Union warned yesterday that the Alcoa plant, which employs 680 workers and indirectly supports 2000 jobs in Victoria’s oldest regional town, may never fully recover as the company took one of the smelter’s two potlines out of action, reducing its manufacturing capacity by 60 per cent.
The Portland smelter, about 350km southwest of Melbourne, lost power for 5½ hours on Thursday because of an issue in the Victorian transmission network, which affected the flow through the Heywood interconnector to South Australia. To balance the South Australian network — powered by gas and a 45 per cent renewables mix plus imported coal-fired generation — 220 megawatts of power was shed from it, blacking out 200,000 homes and shutting down industry.
BHP Billiton’s Olympic Dam mine in South Australia lost power for more than four hours, while other companies including Oz Minerals were affected for six hours. During a September statewide blackout in South Australia, Olympic Dam was without full power from September 28 to October 13. Olympic Dam asset president Jacqui McGill said yesterday the two blackouts in little more than two months had cost it $100 million and “we can’t keep absorbing these kinds of costs”.
BHP yesterday stepped up its public campaign over crippling energy policies it warned were putting jobs and investment at risk. Ms McGill reiterated that BHP building its own power station and disconnecting from the grid was not in South Australia’s best interests, contrary to an assertion by state Treasurer and Energy Minister Tom Koutsantonis that it should do so to avoid further power outages. “We’re at a limit of what we can actually do,” she said. “I can’t secure supply for Olympic Dam right now and that is a deep concern to me and of course the board of BHP Billiton as we look to further invest in Olympic Dam.”
BHP employs 3000 people in South Australia, and a further 43,000 nationally. The company last financial year paid $2.5 billion to the federal and state governments, including $1.3bn in royalties; $62m to South Australia; $753m to Western Australia; $33m to Queensland; and $62m to NSW. The company uses an average of 2880Mw of electricity over a 24-hour period in South Australia, and has a fixed price supply agreement with the operators of the Pelican Point gas-fired power station, Engie.
AWU state secretary Peter Lamps said investors looking at South Australia were worried about power supply and price. “If these two matters can’t be addressed companies like BHP, your Arriums and Nyrstars, and others would be reviewing where they do business,” he said.
More power to the people
3 December 2016
If the electricity outages jeopardising South Australian businesses occurred in a Third World country, many Australians would look on in pity and maybe even think about offering a donation to help. The fact power meltdowns are disrupting lives and economic activity in the world’s most energy-rich nation is testament to the green-Left’s ideological obsession with renewable energy and the breathtaking incompetence of Premier Jay Weatherill’s Labor government.
The haste with which its colleagues in Victoria and Queensland are hurtling down the same ruinous path is equally alarming. The costs of lost production in South Australia and rising power prices in Victoria will be felt nationally.
It is symbolic of the fiasco gripping South Australia that BHP Billiton’s vast Olympic Dam mine, site of the world’s largest uranium deposit, is 265km up the Stuart Highway from Port Augusta, where two coal-fired power stations ceased operations this year, leaving hundreds of workers without jobs. On Thursday, the Olympic Dam operation was without power for more than four hours. The project also was without full power from September 28, during the statewide blackout, to October 13.
On Thursday, power also was cut to other businesses and 200,000 households for hours because of a problem in the Victorian transmission network, on which South Australia relies. The outages left consumers with little confidence about the reliability of supply during heatwaves over the summer, when demand will peak. As Michael Owen reports today, other businesses, from abalone farms to glassblowers, also are being devastated by soaring power prices and equipment damages due to blackouts.
BHP management, understandably, is incensed by South Australian Treasurer and Energy Minister Tom Koutsantonis’s amateurish suggestion that the company should build its own power station for Olympic Dam because it had done so “everywhere else”. In fact, it has done so only in remote locations such as the Pilbara.
The crisis at Olympic Dam will put further expansion of that project in doubt. And, like any user, the mine is entitled to a reliable power supply from the grid, which is the issue at the heart of the crisis. As Malcolm Turnbull said yesterday, if it’s not the responsibility of the South Australian government to keep the lights on in the state, whose responsibility is it? Federal Energy Minister Josh Frydenberg is right to declare South Australia’s “big experiment” with renewables a failure and to point out its overreliance on the Victorian interconnector.
Victoria, too, is beginning to suffer the side effects of its switch to renewables, with energy retailers planning price hikes of more than 10 per cent. Victorian Energy Minister Lily D’Ambrosio’s dubious advice to consumers to “get on the phone and demand a better price from their retailer” is unlikely to help. The closure of the Hazelwood power station could jeopardise the Alcoa aluminium smelter in Victoria’s west and 500 jobs.
Given such considerations, it defies reason that Queensland’s Palaszczuk government, with one of the world’s best coal supplies at the ready, recently adopted a renewable energy target of 50 per cent by 2030. It can only exacerbate Queensland’s financial problems. Bill Shorten has the same target, handing the Prime Minister a gilt-edged opportunity to attack Labor on one of its weak spots. As technology changes, the shift from fossil fuels to renewables will become more cost effective. A premature transition, however, is a blueprint for lost jobs and reduced living standards.
Not a bad effort from The Australian’s editor, although we’re pretty sure that South Australians wish that they could ‘transition’ to somewhere other than the Dark Ages. And the line that “the shift from fossil fuels to renewables will become more cost effective” is utter bunkum: the wind industry has been telling the world that it will soon become so cheap as to be viable without subsidies for over a generation – way back in 1984, Christopher Flavin, the President emeritus of the Worldwatch Institute, ran a pitch that in a few years’ time wind energy would not need to be subsidised.
Over 30 years later, and the wind industry the world over still keeps talking itself into circles: one minute it’s ready to take on conventional generators head-to-head; the next it’s wailing about the need to keep the subsidy gravy train running just that little bit longer.
Cut the subsidies and the wind industry will disappear in a heartbeat. However, for South Australians the damage has long been done and there is no escape from the wreckage.
Welcome to your wind powered future!