And it got that way through the efforts of a legendary political performer, Sir Tom Playford. In the 1940s, Playford (Premier for 26 years from 1938 to 1965) had a gift in the form of vast untapped reserves of brown coal located at Leigh Creek, about 260 km north of Port Augusta which sits at the top of the Spencer Gulf.
Through Tom’s tireless efforts he coupled that resource with his own creation, the Electricity Trust of South Australia (ETSA), which went on to provide cheap reliable power to almost every home, farm and business in very short order: from 1946 to 1965, the proportion of South Australians connected to electricity increased from 70% to 96%. Central to his efforts to populate and industrialise South Australia was the huge power station at Port Augusta.
News last week that Alinta Energy will shut down the Port Augusta power station (which carries Tom Playford’s name), was greeted by the economics lightweights that write for The Australian (and others) with seemingly jubilant headlines such as “Jobs blown away as turbines kill coal”. We have no doubt that the closure of the Port Augusta power station will have Sir Tom turning in his grave.
Kicking off in a big way from 2009, South Australia led Australia’s ludicrous “wind rush”: it currently has over 40% of the installed wind power capacity connected to the Eastern Grid (1,477MW out of the 3,669MW total).
Since then, power prices have skyrocketed – and its unemployment rate with it. Last week, South Australia received the dubious honour of having the highest unemployment rate in the Nation: at 7.6% and rising, it’s even worse than moribund Tasmania, which usually tops that list with ease.
Now, those with some sense of economics – like our Champion, Danny Price – have chimed in to warn that South Australia’s dismal economic situation can only get worse from here – given that the closure of the Port Augusta power station can only “drive up [power] prices”.
South Australians Pay Highest Prices For Most Unreliable Power
“Renewables now account for 39 per cent of our electricity generation which is way ahead of the original target we set of 20 per cent. We now have the highest rate of solar penetration per capita of any country in the world and we have the second highest rate of wind farm penetration per capita than any country in the world.”
What he doesn’t add is that this not only gives South Australia the country’s highest power prices and a dependency on Victoria’s coal-fired power. It also gives it power that can’t be relied upon, as locals found out yesterday.
Power has been restored to most South Australian homes after a widespread blackout put thousands into darkness, when the state lost electricity supply from Victoria. A spokesman for SA Power Networks said the state lost supply from “upstream” when the interconnector shut down, triggering an automatic loss of power — load shedding — in SA, resulting widespread outages.
About 110,000 homes were affected by the load shedding from Victoria, which started about 10.20pm on Sunday night — and there are warnings this morning that such a large blackout could happen again. When the Victorian system shut down, 160 megawatts of energy was lost and wind power did not supply energy because it often does not start until 3am.
Power Is So Dear Nearly 10% of SA Homes Have No Electricity
There are more than 50,000 homes (in a state with a population of only about 1.6 million) that have no electricity whatsoever – and thousands more having their power cut every year – simply because they can no longer afford it. Now with the closure of the cheapest generator in the State – the Port Augusta power station – things can only get worse from here.
In truth, what led to Alinta Energy’s decision to ditch its Port Augusta plant is the monstrous market distortion generated by the Large-Scale-Renewable-Energy-Target (LRET) the Federally mandated $50 billion wind industry subsidy scheme paid for by all Australian power consumers as a hidden tax on retail power bills.
On the rare occasions when wind power is able to deliver meaningful output to the grid – which is usually at night-time – wind power outfits are more than happy for the dispatch price (the price paid by the grid operator to generators) to hit zero – and often pay the grid operator to take their output.
The LRET effectively forces retailers to take wind power output ahead of every other generation source. Failure to take wind power and the Renewable Energy Certificates (RECs) that go with it leaves the retailer liable to pay a fine (the “shortfall charge”) of $65 for each MW/h the retailer falls short of the LRET’s mandated target.
The REC that is issued to wind power generators for each MWh of wind power dispatched (currently worth around $50) forms part of the bargain struck under the Power Purchase Agreements (PPA) wind power generators hold with retailers, containing fixed and guaranteed minimum prices of between $90-120 per MW/h (3-4 times the cost of conventional power).
The wind power outfit collects the REC, which passes to the retailer who then surrenders it to the Clean Energy Regulator, thereby, avoiding the “shortfall charge”. The price fixed by the PPA is tied to the expected value of the REC, the wind power outfit gets the price fixed by the PPA, irrespective of the dispatch price; and the power consumer pays the price fixed by the PPA, plus a retail margin on top.
As a result of the above, when they’re delivering to the grid, wind power outfits are happy to watch the dispatch price plummet, punishing base-load generators – like Alinta Energy, while having no impact on their own returns. It’s what is called predatory pricing.
Perverse Renewable Policy turns Wind Power into Super-Predator
The well-publicised unemployment at 7.6% basically masks the pockets of regional and youth unemployment. Adelaide’s northern suburbs like Elizabeth have youth unemployment rates in the order of 40%. And with the imminent closure of big employers, like motor manufacturer, General Motors Holden (with another 1,300 jobs on the chopping block) SA can only look forward to a generation of even more despair.
And that brings us to another well-worn wind industry myth: the yarn about wind power creating thousands of ‘groovy-green’ jobs – lately used by wind industry spruikers to garner support for the retention of the LRET.
SA has more wind turbines per head than any other state – its great ‘wind rush’ took off in earnest in 2010. Since then, its power prices have surged to be among the highest in the world (with the closure of the Port Augusta power station they’re about to rocket again). Over the same time scale, its unemployment rate has jumped to be the worst in the Nation; and – with escalating power prices – can only worsen from here.
So, with $billions ‘invested’ in wind power in SA, we put the poser: what happened to all of the lasting, well-paid jobs promised by wind power outfits during their nauseating community ‘consultations’? Maybe the answer is found by taking a look at Germany, which, like SA, was beguiled with the self-same same pitch and finally the Germany’s Unsustainable “Green” Jobs “Miracle” Collapses.
Renewable energy was supposed to create tens of thousands of green jobs in Germany. Yet despite three-digit Euro billions of subsidies, the number of jobs is falling rapidly. Seven out of ten jobs will only remain as long as the subsidies keep flowing.
The subsidization of renewable energy has not led to a significant, sustainable increase in jobs. According to recent figures from the German Government, the gross employment in renewable energy decreased by around seven per cent to 363,100 in 2013. Counting the employees in government agencies and academic institution too, renewable energy creates work for about 370,000 people.
This means, however, that only to about 0.86 percent of the nearly 42 million workers, which are employed in Germany, work in the highly subsidized sector of renewable energy. Much of this employment is limited to the maintenance and operation of existing facilities.