Pelican Point power station revival likely under State Government electricity plan

COULD a mothballed gas-fired power station help bring down electricity prices in SA? It’s in prime position to secure a new state contract aimed at cutting bills and carbon emissions.

• Power prices surge during wild storm, businesses hit
• You’re spending up to $1000 too much on power
• Energy price rose as Port Augusta power station closed
• Firm’s $500k power grant eroded by skyrocketing bills

PELICAN Point’s gas-fired power station is in prime position to secure a new state contract aimed at driving down electricity prices and cutting carbon emissions by increasing competition.

In a further bid to cut energy costs, Premier Jay Weatherill on Thursday revealed a $24 million scheme to increase South Australian gas supplies by encouraging exploration.

An electricity crisis in July triggered the temporary revival of the mothballed Pelican Point, which can produce 479 megawatts or a quarter of the state’s power, because many of the state’s biggest employers were on the brink of shutting down.

Wholesale electricity prices have soared since Port Augusta’s coal-fired power station shut down in May, sparking criticism of SA’s world-leading adoption of intermittent renewable energy.

The State Government hopes to slash prices through tendering for 75 per cent of its energy needs over the next decade — about 360 gigawatt hours per year — and introducing a new competitor into the energy market.

The mothballed Pelican Point power station.

Federal Energy Minister Josh Frydenberg told The Advertiser he welcomed efforts to promote gas exploration but branded the 14-year-old state Labor government “a bit disingenuous” for attempting to pin blame for high power prices on the former Liberal government, which privatised ETSA.

Opposition Leader Steven Marshall condemned the plan as woefully inadequate to cut prices, saying Mr Weatherill had driven out Port Augusta’s low-cost generator and was now being forced to spend $24 million to supply gas to SA.

M Weatherill said Pelican Point was eligible for the state tender, but not Torrens Island operator AGL, because it had not mothballed its plant and was, therefore, not a new player.

“What we’ve got with Pelican at the moment is a temporary solution. There’s no commitment from them to operate in the longer term,” Mr Weatherill said.

Port River-based Pelican Point looms as the frontrunner because the gas-fired station meets the state’s demands for low carbon emissions and can relatively quickly be fully reactivated beyond the present arrangement to increase generation until the end of summer.

In a statement to The Advertiser, Pelican Point operator Engie’s head of corporate affairs, Jim Kouts, said the power station had been mothballed in 2014 because it was not commercially viable to maintain operations.

“Pelican Point continues to seek economically viable offtake arrangements and we welcome the opportunity to work with the State Government and consumers to meet their long-term energy needs,” Mr Kouts said.

Australian Energy Council chief executive Matthew Warren said SA had plenty of competition and generation but too much of that electricity was intermittent.