Paul Starick: Blackout warnings send Australia back to the dark ages

Alarm bells about blackouts have been ringing in SA for years, writes Paul Starick. But do we blame the sale of ETSA, the use of renewables - or something else?

Alarm bells have been ringing loudly in South Australia for more than 20 years about blackouts being caused by depleted electricity supply.

The state has been the canary in the coalmine for the privatisation of a state-owned electricity generation, distribution and retail network – the former Electricity Trust of South Australia (ETSA) – along with SA’s world-leading embrace of renewable energy.

This has coincided with a system of state power utilities transforming into a national electricity market, covering all of Australia except the Northern Territory and Western Australia.

This is the same market that Premier Peter Malinauskas on Wednesday declared was broken, because in an energy-rich, first-world country like Australia people were being told to turn lights off to keep the system going.

“We are witnessing market failure on a grand scale,” he said.

Mr Malinauskas and his government, particularly Energy Minister Tom Koutsantonis, are using the latest crisis to fuel their longstanding argument for state ownership, particularly of power generation.

Labor’s landslide March 19 state election victory handed it a mandate for a $593m state-owned and operated hydrogen power plant at Whyalla – a centrepiece promise.

Privatisation of power assets is an argument even older than the debilitating climate wars that have haunted federal politics throughout this century. So are the generation shortfalls that triggered multiple blackout warnings in the past week. The present crisis is a result of years of disgraceful failures by policymakers.

Some believe state ownership is the answer – 23 years after ETSA’s highly controversial privatisation. ETSA Utilities was sold in 1999 to the Hong Kong-based Cheung Kong Group. Retail, transmission and generation arms also were privatised. In an Advertiser poll published just nine days before the statewide blackout of September 28, 2016, 51 per cent of respondents said ETSA’s sell-off by the then-Liberal government was the key reason behind the state’s electricity crisis. Only 15 per cent blamed investment in renewable energy to replace coal, a significant factor in Port Augusta power station’s closure that May at the cost of more than 180 jobs.

This embrace of renewable energy, as early as 2006, prompted former US vice-president and renowned climate campaigner Al Gore to declare SA a world leader in the field. This too became controversial, when renewable energy was incorrectly cited by conservative critics as the cause of the statewide blackout in the subsequent national furore.

A photo taken on September 28 shows transmission towers carrying power lines, toppled by high winds near Melrose in South Australia after "unprecedented" thunderstorms triggered a statewide blackout. Picture: AFP Debbie Prosser

Wind farms alone did not cause the blackout but the failure of their crucial control systems was a major contributor. The Australian Energy Market Operator’s (AEMO) official report into the blackout said the failure of wind turbine control settings responding to multiple grid disturbances led to the statewide blackout.

All four windfarms taken to court by the Australian Energy Regulator agreed to be fined for breaching rules, although none admitted to causing the blackout.

AGL faces a $3.5m fine, plus costs, with the Federal Court currently considering its judgment.

Pacific Hydro, Hornsdale and Snowtown farms were fined $1.1m, $550,000 and $1m respectively.

The flurry of AEMO blackout warnings in the past week is not unprecedented. Way back on December 4, 1999, The Advertiser reported the national electricity market manager had issued warnings almost every day that year that the state’s power supplies were hovering dangerously close to demand.

The then-treasurer Rob Lucas said: “With a tight supply/demand balance, yes, we’re more susceptible to having problems. We need more power in South Australia.’’

Two days before, about 400,000 of ETSA’s 780,000 customers suffered power cuts after three major network failures triggered rotational load shedding, or staged blackouts. On average, each customer was without power for 90 minutes as havoc caused by the blackouts included five trams and 18 city trains stopping on their tracks (the latter when network control computers shut down), police holding up boom gates, BankSA temporarily shutting down 70 per cent of its branches and Modbury Hospital cancelling two operations after losing power.

A long-term problem. Woolworths' service manager in Glenelg on December 2, 1999, assisting customer Lisa McCarthy and her baby son Harry (eight months) to find groceries during a widespread power blackout. Pic John Sherwell.

The solution then was held out to be the gas-fired Pelican Point power station, which was commissioned to come online in November, 2000, then with 150MW, and a further 350MW by May, 2001. But the then-Labor leader Mike Rann warned electricity consumers were being “softened up for more power blackouts’’ before ETSA’s privatisation.

History is repeating. National cabinet on Friday agreed to “continue to working together to protect and improve outcomes for Australian (energy) consumers”.

After almost 23 years of failure, our leaders need to act more decisively to fix this enduring and debilitating crisis.