Rush to wind forcing power prices up
Source: The Australian, 15 July 2016
The traditional manufacturing state of South Australia, with the worst jobless rate in the country, is paying the highest prices in the national electricity market.
South Australia’s lack of access to low-cost coal, an exposure to higher wholesale gas prices and an absence of competition in conventional power generation was to blame, analysts said.
The state’s Liberal opposition has pointed the finger at the Labor’s government’s “overzealous rush into wind power” that it said was driving base-load electricity providers out of the market, pointing to the closure this year of the coal-fired Port Augusta power stations.
Soaring electricity prices in South Australia have seen up to 10 major manufacturers, including BHP Billiton, Arrium and Nyrstar, approach Treasurer Tom Koutsantonis to warn of production shutdowns unless the government intervened.
As a result, an extra 239 megawatts of power will come on line from today after private energy supplier Engie agreed to fire up a previously mothballed generator at Pelican Point, near Port Adelaide.