The State Government announced today that instead of leasing 200 MW of back-up generation for two summers as well as building a permanent 360 MW back-up generator, it will now just lease nine new mobile GE turbines through APR Energy with an option to buy, providing up to 276 MW of generation to the grid when required.
While the longer-term plan is to permanently install these generators and connect to gas, they will be temporarily run on diesel and situated on both the Holden factory site in Adelaide’s northern suburbs and the Adelaide Desalination Plant in Adelaide’s southern suburbs.
The South Australian Business Chamber Executive Director Industry & Government Engagement, Anthony Penney said “The South Australian Business Chamber has always supported the State Government leasing 200 MW of temporary generation to get South Australia through the next couple of summers to allow for longer term policy decisions that will incentivise required private sector investment.”
“While today’s announcement does not provide transparency on the actual cost, the South Australian Business Chamber expects it must be considerably less than the $470 million allocated in the SA Energy Plan, being $360 million for a permanent 250 MW back-up gas generator and $110 million to lease 200 MW of temporary diesel generation.”
“Leasing the mobile generators for two summers with an option to buy provides future flexibility for the Government to relinquish them when they no longer be required and is more encouraging to private sector investors looking at South Australia given the Government is yet to commit to building a permanent back-up generator.”
“The State Government was always going to lease 200 MW of temporary generation and today’s announcement confirms that decision while acknowledging that building a permanent generator as this stage may not be necessary.”
“Following the State Government’s announcement, it has become increasingly critical that all States, Territories and the Federal Government reach agreement on a Clean Energy Target for the national electricity market to ensure adequate long-term investment signals are in place to incentivise necessary private sector investment in generation.”
“Policy certainty for private sector investment is needed to alleviate the need for the State Government to follow through with a more permanent installation of these temporary mobile back-up generators.”
“The South Australian Business Chamber commends the State Government for listening to industry and not committing to purchase an expensive permanent back-up generator while going with a flexible option which allows South Australian consumers to be supported through the next two summers.” he also said.
