Does a new government in South Australia spell doom for renewables?

Extract from The Guardian

South Australian politics

Premier Steven Marshall has vowed to end Labor’s energy ‘experiments’, but the green energy industry is strong in the state

Max Opray

Tue 20 Mar 2018 13.42 AEDT Last modified on Tue 20 Mar 2018 15.53 AEDT

A windfarm near Burra, South Australia. The state’s renewables sector is the strongest in Australia and has substantial locked-in growth in the years ahead. Photograph: Angela Harper/AAP

The new Liberal government in South Australia has pledged to end Labor’s taxpayer-funded “experiments” in energy, but faces a renewables sector full of momentum and a potentially difficult upper house.
Under 16 years of Labor government, South Australia became a world leader in adopting the renewable energy technologies necessary to avert the existential threat of climate change, from the Rann government’s windfarm rollout in the 2000s to the Weatherill government’s commitment to energy storage systems and solar this decade.

The new SA premier, Steven Marshall, has vowed a range of measures that appear to threaten the energy transition, from promising to repeal the state’s renewable energy target (RET), to building a new interconnector with New South Wales for importing coal-fired energy, to cancelling Labor’s deal with Tesla to build a virtual power plant connecting 50,000 home battery storage systems.
As opposition leader, Marshall attacked most of Labor’s energy agenda, including criticism of Jay Weatherill for not intervening to save the state’s now-abandoned Port Augusta coal power plant in 2015.

The new South Australian premier, Steven Marshall, wants to repeal the state’s renewable energy target. Photograph: Tracey Nearmy/AAP

A range of experts and senior industry figures however aren’t so sure Marshall’s proposals have the capacity to do much damage to a local renewables sector that is by far the strongest in the country and has substantial locked-in growth in the years ahead. Marshall’s pledge to remove the state RET in favour of a national framework sounds significant, but experts note that the current target of 50% renewables by 2025 was achieved last year.
Energy analyst Hugh Saddler told Guardian Australia that even Labor’s election pledge to lift the target to 75% was somewhat redundant: “Take the rhetoric with a shovel full of salt. The amount of renewables projects already in development will take the state up to 75% as it is.”

It is a point echoed by a range of experts and top industry professionals including the Tilt Renewables chief executive, Deion Campbell, who is overseeing a range of solar, wind and energy storage projects in the state.
A dissenting voice is Solar Citizens South Australia campaigner Dan Spencer, who campaigned during the election to pressure the Liberals to abandon their plans for repealing the target. “The target is really important, it sends a message to community and industry about where we’re going. Scrapping our renewable energy target signals that maybe they’re not welcome here,” he said.
A centrepiece of Marshall’s energy security plan is a $200m fund to enhance connections with the national grid, with the only project announced so far a new interconnector with NSW.
Marshall initially sold the project as an energy security measure, but later began to promote it as a way to sell SA’s excess green energy generation interstate.
David Blowers, an energy policy specialist at the Grattan Institute, said it will certainly be able to do both, but believes initially it will import more energy from NSW than it will export.
Longer-term however, he thinks an interconnector might actually incentivise further renewables growth in SA as there will be a bigger market to sell energy to.
Blowers says an interconnector could take up to nine years to plan and build, and cost well in excess of Marshall’s initial $200m fund.
“It needs a proper cost-benefit analysis, and promising to do it without that analysis is risky,” he said.
Then there is the question of what will become of Labor’s plan to build a virtual power plant connecting 50,000 home battery storage systems in partnership with Tesla.
On Monday Marshall told ABC Radio National that the plan is “not part of our agenda”, but when being sworn in as premier later that day clarified that if Labor had already entered into any contracts “we’ll be honouring them”.
Even if the plan is abandoned, Marshall has committed to proceed with his own $100m plan to subsidise the installation of 40,000 solar and home battery storage systems.

The main differences between the plans are a question of who benefits and who pays. Labor’s plan would be largely financed by Tesla, and benefit at least 25,100 Housing Trust homes, who would not have ownership of or have to pay for the home battery storage systems, but would enjoy a 30% cut to their energy bill.
The Liberal plan would cost taxpayers $100m in subsidies to households prepared to buy their own rooftop solar and home battery storage systems, pricing out lower socioeconomic groups.
Blowers said the main difference from an energy infrastructure perspective is a question of ambition.
“[The Liberal plan] of subsided solar home batteries seems to be subsidy for people to reduce reliance on grid, which sounds like a relatively expensive way of reducing energy prices,” he said.
“The virtual power plan is a more interesting experiment, in that those batteries almost become a combined battery that can do a range of things, including selling to the grid when prices are high.”
If Marshall unveils further plans that could impact on renewables, there is one obstacle he will have to face: SA’s Legislative Council.
Although the Liberals are expected to form a majority government out of Saturday’s state election, the SA upper house is a mixed bag.
The Liberals will have to secure the support of the majority of a likely crossbench of six, including two Greens. Nick Xenophon’s SA Best is on track for two seats and supports maintaining the current RET and investing in energy storage networks to underpin renewables.
The SA Best upper house MP Frank Pangallo says the party’s priority will be realising their policy for a non-for-profit energy retailer, but he would not commit to blocking repeals of the RET or funding of the interconnector.
“I think we can work with the Liberals and Mr Marshall, but we’d like them to look at our plan, which makes a lot of sense, unlike theirs,” he said.