Business SA, BHP demand fix for SA’s power crisis as prices spiked after December blackout
POWER prices in South Australia skyrocketed after the December 1 blackout, hitting more than eight times the Victorian rate and leading industry to again call for a fix to the state’s energy woes.
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POWER prices in South Australia skyrocketed after the December 1 blackout, hitting more than eight times the Victorian rate and leading industry to again call for a fix to the state’s energy woes.
An Australian Energy Regulator report into the high prices revealed the wholesale spot price reached $13,767 per megawatt hour at 2am followed by other significant spikes.
Data shows the average peak price on December 1 was about $550/MWh, while it was $65 in Victoria. The next most expensive was $82.70 in Queensland.
BHP has become outspoken about the need to address the state’s power problems after repeated outages have affected its Olympic Dam operations.
Business SA Industry and Government Engagement director Anthony Penney said the price spike demonstrated the affordability issues in SA’s electricity system.
“The load-shedding event last December, the second in 12 months on top of the statewide blackout, demonstrates why the Government needs to get on top of reliability for SA business, particularly when we only had three such events in the 15 years prior,” he said.
SA Energy Minister Tom Koutsantonis said price spikes were becoming more prevalent across the national grid — spot prices in NSW and Queensland both hit more than $14,000 on Monday — which was another sign Australia’s energy market was “not fit for purpose”.
The December 1 blackout, which affected about 200,000 homes and businesses, occurred when the interconnector linking SA and Victoria tripped over the border at 12.16am.
SA was then separated from the National Electricity Market and power supply to some customers was interrupted.
Most properties had power restored by 2am and SA was reconnected to the NEM at 4.46am.
Among those worst affected was the Olympic Dam mine, which lost power for four hours.
“High-priced generation in SA was dispatched to meet demand and this led to high prices for the 2am, 3am and 3.30am trading intervals,” the AER report stated.
“These high-priced events were a result of SA being separated from the NEM.”
BHP asset manager Jacqui McGill said there needed to be action “very soon” improve power prices and the security of supply in SA which had already had a significant impact on Olympic Dam’s production.
When asked about support for an Emissions Intensity Scheme, which penalises high emitting generators and incentivises low-emission energy — a BHP Billiton spokeswoman restated the company’s support for a price on carbon.
Mr Koutsantonis said “energy prices need to come down”.
He said State Government measures including $24 million grant program to help gas companies extract more gas and supply it to local electricity generators first and $31 million for businesses to invest in energy saving technology would help meet that goal.
Last week Prime Minister Malcolm Turnbull backed clean coal-fired power plants, which he said could be part of the mix of technologies needed to prevent SA’s energy problems spreading.