Prime Minister Scott Morrison pledges to invest $250m in interconnectors including Project EnergyConnect in SA-NSW
Scott Morrison has pledged $250m to bolster the power grid and fast track interconnectors between states, including SA to NSW. Meanwhile, a mild spring day pushed SA’s rooftop solar to supply nearly three-quarters of the state’s power needs.
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A power cable connecting grids in SA and NSW will be fast-tracked as part of Scott Morrison’s COVID-19 recovery plans.
The Prime Minister will name Project EnergyConnect to directly link the two power grids as one of three critical projects that the Federal Government will work with states to accelerate via a $250m program.
“These links will help put downward pressure on prices, shore up the reliability of our energy grid and create over 4000 jobs,” Mr Morrison said.
“Our plan for Australia’s energy future is squarely focused on bringing down prices, keeping the lights on and reducing our emissions and these interconnectors bring us a step closer to that reality.”
A second interconnector between Tasmania and Victoria, the Marinus Link, will also be named a critical project, along with a new NSW to Victoria interconnector.
Mr Morrison will announce support for the projects in a major speech on Tuesday.
He will unveil a 13-step JobMaker plan to prevent a shortfall in Australia’s gas supplies by 2024 and to drive down prices.
It will include $52.9 million in the October Budget for unlocking supply in new and existing gas fields, delivering more efficient transportation for gas with new pipelines, and making the market more transparent.
The government will work to set gas supply targets in new deals with the states and seek to impose “use it or lose it” rules for gas licences. A scheme that would force gas producers to reserve part of their supply for Australian markets is also being considered.
A National Gas Infrastructure Plan will also be developed by next year to forecast future gas requirements and to identify priority infrastructure projects, which the Federal Government may back if private sector does not invest, by underwriting them or streamlining approvals.
Wallumbilla will also officially be named the Australian Gas Hub and a code of conduct will be developed for the gas industry, which could be made mandatory if it is not voluntarily put in place by 2021.
Federal backing for the SA-NSW interconnector - called Project EnergyConnect and proposed by transmission companies ElectraNet and TransGrid - comes as its rationale was emphasised over the weekend.
SA hit a record low in operational demand from the electricity grid on Sunday, with rooftop solar meeting most of SA’s needs.
“At the time, weather conditions contributed to SA’s world-leading penetration of rooftop solar PV supplying an estimated 71 per cent of total electricity demand,” Australian Energy Market Operator chief executive Audrey Zibelman said.
While good for solar owners, the low of 379MW at 1:30pm compared to usual weekday demand of about 1500MW makes management of the grid more difficult.
Ms Zibelman said it “points to the critical importance of Project EnergyConnect in helping alleviate potential system security risks under certain conditions when minimum operational demand is low”.
“This new record is not only proof that rooftop solar is SA’s single biggest generator but that we also require careful management and new standards to maintain network security while ensuring households can enjoy as much financial benefit as possible from their systems,” she said.
AEMO has been working with the State Government and electricity companies, SA Power Networks and ElectraNet “to mitigate unintended risks to consumers electricity supply from reducing demand levels”.
Of particular concern would be if SA lost connection to Victoria, which absorbs excess energy from SA and fills in gaps if supply drops.
The NSW interconnector would open up a market for SA’s energy and improve grid management.
“Having a completely different geographic path would greatly reduce the risk of SA being isolated,” Grattan Institute energy analyst Guy Dundas said.
Project EnergyConnect’s benefits include reducing the costs of keeping the system secure, despite the interconnector hastening closure of SA’s gas-fired generators.
The high levels of solar and wind power in spring, on mild days when demand from air conditioners remains low, has pushed SA’s wholesale prices to extraordinary lows.
This month, SA spot prices have averaged below $10/MWh – compared to the average $110/MWh for 2018-19.
September was traditionally the cheapest month of the year, and Mr Dundas cautioned that prices would rise again in summer.
“Wholesale prices have fallen everywhere in the national electricity market,” Mr Dundas said.
“From the household and small business point of view, you don’t see that flow through the next day, or the next bill, but it is a good time to shop around.”