static image

Positive steps on SA energy challenges - but summer is coming

The SA Government's energy package will help over time to address the serious problems facing energy users, Australian Industry Group SA Head Stephen Myatt said today, but more will be needed – and soon.

"Soaring contract prices for energy and the huge July wholesale electricity price spike are damaging SA industry. More price events could be in store when summer demand peaks. Many factors have contributed to SA's situation: tight gas supply, dependency on the interconnector to Victoria, a concentrated supply side and an inflexible demand side. The growth of renewables in SA without action on these weaknesses has increased the pressure.

"Ai Group has been calling for action from all levels of government. Today's announcements show that the SA Government is listening. If the Government can incentivise more suppliers of electricity and gas it should reduce the prospect of extreme price spikes. Effective integration of national energy and climate policies is essential to underpin investment in our energy supply, and the proposed intensity scheme study will be a useful contribution to understand the options better.

"However, it is too soon to know how effective the new measures will be – and likely too late for them to influence the immediate risks to SA as summer approaches. Sustained high temperatures can lead to both high energy demand and constrained supply from overloaded infrastructure. The upgrades to the SA-Victoria interconnector over the past year have been the biggest contributor to recent price events. Industry and other energy users will have to hope that the upgrade proves its worth over the summer, and that initiatives from SA and COAG deliver relief beyond that," Mr Myatt said. 

Media Enquiries: Stephen Myatt – 0419 818 048