Don’t blame wind for power market failure

MEDIA RELEASE 

14 July 2016

Don’t blame wind for power market failure

Renewable energy is being unfairly made a scapegoat for failures in our power grid, says the Conservation Council of SA.

And the state’s peak environment body has backed the call from the social services sector for a state-wide summit on the future of our power system.

  • We need a consensus from community, industry and government on how we can fix the mess in our power grid
  • Wind and solar not to blame for price hikes

“Wind and solar are not to blame for problems in the SA power grid,” said Conservation SA CE Craig Wilkins.

“They are a political scapegoat for broader failures in an electricity market that rewards over-investment in poles and wires and bad behaviour from too few and too powerful big energy companies.

“As a result, the push down in wholesale prices from wind and solar is not being passed on to consumers. That’s a failure of the power system, not renewables.

“The price of power is rising all across the country – much of it caused by the linking of Australia’s domestic gas prices to the international export market.

“And recent analysis from Pitt & Sherry* shows there is ‘no relationship between the share of wind generation and wholesale prices in SA.’

“So let’s stop making wind the scapegoat and start fixing the real problems,” he said.

The 2015 ‘State of the Energy Market’ report from the Australian Energy Regulator* shows that South Australia’s volatility (the ups and downs in wholesale prices) was lower than in Queensland – despite Queensland having essentially no wind power.

“Queensland has wilder swings in wholesale prices than our state, even without wind. So clearly there’s more going on than just the amount of wind in the mix.  What Queensland and SA do share, though, is an over-concentrated electricity market dominated by too few players.  That’s a real market failure,” he said.

The Conservation Council has backed the call from Uniting Communities and others in the social services sector for a summit on the future of power supply in SA.

“There is no doubt our power grid is undergoing a rapid transformation, as dirty power sources are increasingly replaced with cleaner options.

“That’s exactly what needs to happen if we are to meet the climate change targets Australia committed to in Paris.

“But there is also no doubt we have to manage the transition of our grid carefully to ensure the benefits of cheaper, cleaner renewable energy are shared equally by all in the community, and businesses are helped to adjust to the new energy landscape.

“Our state needs to have greater control of our energy future, rather than be reactive to short term crises that emerge.

“We need consensus from across government, industry and the community about the way forward.  Because the reality is: the next push for renewables is not going to come from government policy, but from individual households, communities and businesses choosing to go down solar and wind options as prices continue to fall.  It’s going to happen whether the old energy utilities like it or not.

“A summit involving community, industry and government to deal with the challenges in the SA electricity market is a welcome step,” Mr Wilkins said.

Further comment: Craig Wilkins 0417 879 439

Sources: 

Cedex Carbon Emissions Update (to June 2016)

Australian Energy Regulator State of the Energy Market 2015

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Contact Conservation SA on (08) 8223 5155, general@conservationsa.org.au, or at our offices at the Joinery at 111 Franklin Street, Adelaide.

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